Sep 16, 2020 | Governance, Innovation, Strategy
A short while ago I felt very sad, and uplifted at the same time.
Weird.
I was watching my 4 year old granddaughter play , keeping herself company in her own fantasy world, jumping from one thing to another without any hesitation, no sense of self consciousness, but following a ‘logic’ only she could see, hear and feel.
Creativity being expressed in a totally natural way.
I am pretty sure most people have seen this, at some point, and felt uplifted. Then I realised, that in a few months, she would be going to school, and that joy of random thought, learning by experience, feeling absolutely free from judgement was about to hit the wall.
School works with a set of disciplines. Numbers, regulated behaviour, nominated time slots for scheduled activities the kids did not choose. It teaches organisation, discipline, and a ‘top down’ awareness to these rapidly developing brains consistent with what ‘conventional wisdom’ has decreed as appropriate for the future life kids will lead.
Who knows anything about the future life of my granddaughter?
Watching her, I also recalled that I had seen the previous week the announcement of the death of Sir Ken Robinson. That made me sad again, all over,
For those few on the planet who do not know who Sir Ken was, just google ‘the most watched TED talk’ for a dose of his verbal and philosophical magic.
Asking how schools kill creativity in kids, and how to fix it, was his life’s crusade. His TED talk at the time of writing has 69 million views, several of which have been mine, and a much larger number have been those I have persuaded, cajoled and pushed to watch.
Here, in front of me was the living reason he took on the world of education academia.
It also occurred to me in those minutes of reflection, that over time, my granddaughter may be pushed into doing the things she was good at, in preference to the things those she liked to do.
That is how the world now works.
Most people have things they are good at, but do not particularly like doing. I certainly have. To meet the outside markers of success, most go with those things, and use their free time for the things they really like doing. In those times, hours seem to pass like minutes; somehow, you have entered what some would call ‘a flow state’ where time seems compressed, and the output, is just for its own sake.
Joyous.
Wouldn’t it be fantastic if the things we like become the things we spend our days doing to earn a living?
Imagine living your life in a state of ‘Flow’
My granddaughter was in a state of flow playing, and it seems like my duty to extend that as far as possible.
A lucky few get to feel it for themselves every day, and as a result, have a chance of both being as happy as they can be, and changing the world.
Sep 14, 2020 | Change, Governance, Management
‘5 why’ is a tool often used to understand the real cause of a problem. Finding those real causes is often like peeling an onion: one apparent problem or more often symptom of a problem, leads to another, to another, until the root cause is clear.
Often however, we make changes in the absence of a compelling problem, usually to take advantage of an opportunity, or simplify/optimise some sort of process. In those cases, I have often seen the onion reverse itself.
You end up with unintended consequences.
A pack change that confuses existing customers, a change of supplier for a better price that has consequences for operational efficiency; a product feature added that customers said they wanted that added to unanticipated production complexity, and so on. I have suffered from several of these unintended consequences of seemingly sensible, well considered and pro-active changes.
Before any change, exercise a ‘Reverse 5 why’. Look for the wider consequences that may be caused by the change, and take the impacts into consideration.
Move a few steps back, and ask yourself; are there any impacts from this change? How will other functional responsibilities, customers, supply chain partners, be affected? What unintended consequences may occur?
It is very easy to become close to a project, and proceed to implementation without taking a ‘helicopter’ view of the potential impact beyond the immediate context of the change. Once you start doing it, taking that extra moment, which is usually all it takes, it becomes an integral part of an automatic due diligence process undertaken before making a change.
Building an automatic ‘Reverse 5 why’ into your planning processes will identify risk, and build the confidence of others with a veto in the projections you will have done to support the change.
b
Sep 2, 2020 | Governance, Marketing, Small business
How do you execute on that BEHAG?
How do you fulfil the vision?
How do you accomplish the mission?
These are all questions I get from time to time from people stumped at the point where the dream, whatever label you choose to put on it, has to be turned into some sort of activity.
A dream in the absence of the steps to achieve that dream is commonly called a fantasy.
The process that I help people through is what I call ‘Hindsight Planning’
It has four distinct steps.
Step 1. Understand the market dynamics.
There is no avoiding the necessity to understand the drivers in the markets you are seeking to leverage. The technologies, barriers to entry and exit, capital requirements, regulatory requirements, major competitive factors, and a host of others all play a role. In the absence of at least having some idea of the ‘Current state’ of the market, you risk that plan being just a shattered dream. Unless you understand what it is you want to change in order to grow, and what the probable drivers of that growth will be, it will remain a fantasy.
Step 2. Agree on the shape of the business down the track.
Planning horizons change from market to market. Technology markets are changing almost as we speak, some others have very long lead times, although it is often these that are disrupted by newcomers who throw the long held beliefs that have driven the market over the wall and change everything. Nevertheless, difficult choices need to be made. What you will do and how, but often more importantly, what you will not do and why.
Step 3. Plan backwards.
Having agreed the shape and size of the business in 1, 3, or 5 years, whatever horizon you have agreed on, the task now is to ‘put yourself there’. Imagine the outcome has been achieved, and then articulate the steps you have taken in that journey. This might seem just to be an exercise in words, and to some extent that is true, but importantly, it is also an exercise in perspective. Working backwards enables you to test ideas, assumptions and choices, against an outcome you have agreed has already occurred, albeit in your collective minds. In that way, a ‘reality filter’ of sorts has been applied.
Some of the obvious questions that need to be answered may be:
- Where did the revenue come from? Growth is not possible in the absence of revenue, so list the sources on a whiteboard. Current customers, new customers, channels, business models, products, technical achievements, geographies, and so on. However, do not just list them, articulate in some detail how it has happened. Again, that past perspective adds real ‘grunt’ to the conversations.
- Where did the capital come from? Growth is a veracious consumer of resources, particularly capital. How did you fund that growth? Reinvestment of retained earnings, capital raising from friends and family, or from the markets, public and private, debt finance considering the necessity for assets as collateral?
- What is the dominant business model? Are you a middleman, retailer, on line item sales, subscription sales, did you achieve a position to monetise arbitrage opportunities, and so on. Digital has delivered a host of new and emerging business models to us over the last decade, but one thing that has become clear, if it was not already, is that differing business models do not live comfortably in the same house. Therefore, if your revenue streams come from different business models, the structure of your resulting business needs to be decentralised by those differing business models.
- What is the ideal corporate structure? Have you remained private, are you publicly owned, a partnership, Joint venture, franchise system? There are many options, and as in the previous question, potential siblings rarely successfully live in the same house.
- What capabilities were required to succeed? This is a question in two parts. Firstly, what capabilities were required from individuals, technical, strategic, financial, and all the other factors that make human beings able to contribute? Secondly, what were the organisational, leadership and cultural factors that enabled the organization to leverage the capabilities the individuals brought in each morning as they turned up to work.
Step 4. Execution of the plan
As noted, a plan of any sort remains a fantasy in the absence of the means to execute, and deliver on the plan.
Executing on a plan to achieve an objective has a few wrinkles that must be accommodated:
- ‘No plan’, as George Patton said, ‘survives first contact with the enemy. This means that the plan must be sufficiently agile to accommodate the unexpected, while remaining focussed on the objective.
- All stakeholders, and most particularly those who are employed, must not only know the plan, but they must understand and ‘buy into’ the objective, while reacting tactically to the unplanned things that confront them. The means to achieve these usually mutually exclusive outcomes, is that they not only understand their role, and the part their role plays in the larger objective, but they must also be prepared to be more than just an unthinking functionary, doing as they are told, or at least as they understand they are being told. It is a process of critical thinking and feedback going up, down, and very importantly, across the management chain. Not an easy thing to achieve and one we normally just attribute to some natural ‘leader’ who emerges. However, everyone has the capacity to be a leader, simply by being a participant in the process and holding themselves accountable for the actions of others.
- Operationally deploying ‘Nested’ functional plans. Like the operations of a mechanical watch, to tell accurate time, each part of the mechanism must contribute in a defined way to every other part of the mechanism, while not being overtly connected. There are always a range of flywheels driving others of varying sizes that are doing different roles, that all add up to that accurate time. An organisation is just the same, and this diversity of role, timing, and relationships to other flywheels must all be kept in synch if the outcome is to be achieved. No easy task, which is why it so often fails. Successfully driving towards an objective, means that the various parts of the mechanism of the organisation must work be synchronised in ways that are able to accommodate the tactical opportunities and reverses that inevitably occur while not losing sight of the objective. This all requires what I call ‘operational nesting’
When you need an expert to help you think about these things, let me know.
Aug 20, 2020 | Governance, Management
The term ‘After Action Review’ emerged from the US military, which formalised it after facing a range of disasters in the field, from Vietnam to the Middle East. Finally, it became obvious they were repeating the same mistakes, consistently.
They should have asked an accountant earlier.
Standard good management practise after a capital expenditure project has been to review the outcomes of the planned expenditure compared to the expected outcomes. Variations in outcome to the plan needed understanding, to ensure errors in judgement were not repeated.
In my experience, it rarely happens well enough; too much corporate politics and ego are involved. However, the idea is not a new one; it just makes absolute sense, which is why you should build it into the performance management culture of your business.
Five simple questions, the first is easy, that is the plan, the following three are where the gold of improved performance hides when you dig hard enough, and ensure the lessons are well learned. The last drives future action.
- What did you plan to make happen?
- What actually happened?
- What caused the difference?
- What can we learn?
- What specific changes will we make next time?
Such a process, embedded in your performance management culture will deliver guaranteed results. ‘Rinse and repeat’ the question process after every project. No matter how small the project may appear to be, an AAR should be automatic, simply a standard part of the process. After a while, it will become second nature to observe the things that may cause the unexpected, plan for them, and take steps to remove them before they occur.
Therein hides one of the secrets of continuous improvement in profitability.
Jul 10, 2020 | Governance, Leadership
Both sides of politics are claiming victory in last Saturday’s by-election.
Labor because they won, and Liberal because they did not lose by much, and anyway they did not expect to overturn a century of precedent in by-elections, despite the PM having high personal approval ratings for the handling of the corona crisis. Largely forgotten is the pathetic floundering that went on over the bushfire season, except by those still waiting on the promised assistance, and living in tents.
What lies underneath is a range of gaps, often chasms, between opposing views and outcomes.
It is not unusual to have substantial socio economic gaps in an electorate, it just seems those in Eden Monaro are more starkly drawn.
Gaps between the coast and inland regions, gaps in the nature of business in the varying regions, lifestyle, wealth, access to public services, and more.
The electoral result is an average, and as with all averages, they can be very misleading.
There are also substantial gaps in the apparent ‘values’ held by differing parts of the electorate, and a huge gap between the promises of politicians seeking a vote, and their performance on the ground.
As a group, we are increasingly cynical and distrustful of those in politics who espouse values, then appear to be acting in a contradictory manner.
These differences produce internal conflict that when combined with a poor economy, starts fights over how the pie is to be divided. There will be pressure on the current Covid induced income support regime, and longer term, to change corporate and individual tax rates, not just to fix the unholy mess they are in currently, but to set out to address the inequities.
However, when you have the gaps in wealth distribution, personal and corporate values, political ideologies, and powerful vested interests, you have a volatile environment, not well suited to making fundamental changes. Therefore we will get more and more Band-Aids stretched over a broken system.
Then you have the external environment to consider. There is geopolitical strife of many colours, the war for trade, technology, talent, capital, and over the systems of government that apply.
Einstein’s first law, that energy is not created or destroyed, it just moves from one form to another, seems to apply to the manner in which the pie is cut. In that process there are always winners and losers, and nobody wants to be a loser, while the winners are usually pre-ordained.
That is the situation we find ourselves in currently, wealth and power are based on increasingly fragile foundations. The implications of those foundations crumbling are challenging to envisage and articulate, and so remain undiscussed in open forums.
As I said, elections are averages, and averages always hide the essential truth.
Jul 8, 2020 | Governance, Leadership, Strategy
I am not in the habit of quoting V. I. Lenin, but he did get some big things right.
‘There are decades where nothing happens, and there are weeks where decades happen’
We are in one of those ‘weeks,’ the inflection point of a lifetime for most of us.
Almost every trend we look at, and forecast by, is somewhat linear. There will be bumps and jumps, but overall, looked at over time, they are linear.
Most business models are built on the automatic assumption of those linear trends holding true. Our institutions utterly depend on that being the truth. As a result, when the inflection point comes, it is traumatic; the response slow and often inappropriate, assuming all will return to a ‘new normal’, that it is just another bump in the road. Perhaps a nasty one, but a bump nevertheless.
I suspect that is not the case currently, this is not a bump in the road; this is a U-turn down a bush track into the unknown.
Forces build for a while in the background, looking linear, and then some sort of catalyst creates a confluence that totally changes the forces that drive the industry. The resulting chaos creates opportunity as much as it creates uncertainty, disharmony and dislocation of the pre-existing status quo.
Today, we are watching as several trends come together, which will create a new normal, looking little like the old one.
The digitisation of everything, has taken a dose of steroids since January, changing the way we shop, communicate, and work. To me it looks a bit like I imagine the confluence of the internal combustion engine and electricity looked in 1920. They had been around for a while, but suddenly converged to become transformative powerhouses that led to a 50 year burst of productivity increases.
Similarly with education. We have been wandering down a road of increasing commercialisation of education, marketing a tertiary qualification to Australians as the road to a good life and to international students as the ticket to wealth and a visa, while gutting the development of trade skills. Suddenly we have closed borders, the major source of international university students actively discouraging coming to Australia, and a massive shortage of depth of trade skills we cannot fill with 457 visas.
The education sector is in deep financial and philosophical trouble.
What about energy? For years we have clung to coal as not only our primary energy source, but as a huge magnet for international investment and export commodity sales, to the active exclusion of alternatives. Now we have wind and solar producing energy more cheaply than coal, and technology rapidly solving the storage problem. At the same time, the distribution of power is changing rapidly from a centralised system to a localised one. That confluence must be producing a bad case of reflux in Canberra. Political donations, existing political institutions, and relationships will not be enough to stem the tide, and the outcome is likely to be bloody, inevitable, and very soon.
Coming at us are revolutions in biology, driven by gene therapy and CRISPR. The human genome was first mapped in 2003, at the cost of billions. Now you can send a sample along and get your own map for a couple of hundred dollars. CRISPR, discovered in 2012, has accelerated our gene editing capability faster than Henry Ford’s production line accelerated the manufacture of cars, and look what happened then. Massive investment in roads, the 2 day weekend, and people travelled daily further than they had in a lifetime just a generation before.
That is before we consider the coming tsunami of AI, Quantum computing, additive manufacturing, and the new materials being developed with properties that seem to be out of the mind of Jules Verne.
As the old Chinese proverb goes: ‘May you live in interesting times’. We are, and to some measure that will be due to the changes driven by the Chinese journey out of poverty into world dominance in just over 30 years. This is trend reaching a tipping point without a lot of notice, or thought about the consequences.
Are you ready?
