Will regulators ever catch up with innovators?

Will regulators ever catch up with innovators?

Nov 3, 2017 | Change, Governance, Leadership

 

Following on from the rant about the dominance of Gooface a short while ago, comes this ‘explanatory‘ note from Facebook about a test being carried out in several countries that smacks of changes being made to the newsfeed that will remove completely organic posts from a company you might follow.

In other words, if a company wants to communicate with you, the current squeeze that applies is insufficient, there is a revenue opportunity available to Facebook by removing completely the currently thin chance their posts will get into your feed.

Josh Bernoff explains it clearly, in this post  along with his usual dose of cynical amusement at the arrogance of Facebook.

If there was ever evidence needed that marketers have no option than to build, over time, their own digital presence, based on digital properties they own,  it is this move to eliminate the organic reach that gave the social platforms their start, in the chase for revenue.

In this country (Australia) we have been beset by an ongoing debate about the rules governing the ownership of media. Back in the 80’s, rules were imposed and adjusted over time, that prevented ownership in one regional (in Australia) market summarised as ‘no more than 2 out of three and  75% reach’.   They were designed to ensure the diversity of ownership and therefore points of view being expressed by the few who had the wherewithal to own a media outlet. It finally dawned on the geniuses in Canberra that by stealth, while they were not watching, Gooface and their ilk had changed the face of media, and the rules were the equivalent of banning the shooting of dinosaurs.

Righteous,  but a little redundant.

Now everybody can own a media outlet, everyone can be a publisher, for a few dollars.

I suspect the answer to the question in the headline of this post is a definitive ‘No’ and we all know the problems that emerge when you are doing nothing but playing catch-up in an environment where your domain knowledge is limited to non-existent. You get the  sort of reactionary decision making and half-baked ideas that make you look stupid.

It strikes me that this is the core of the lack of confidence slowly eroding the respect and confidence we have in our institutions, and the only true antidote to that sickness is a solid dose of leadership.

I am not holding my breath.

 

Message to the new CEO.

Message to the new CEO.

Nov 1, 2017 | Change, Governance, Leadership

It is a scary place, no matter how much you have worked  and trained for it, suddenly you are the man (or woman) everyone is looking to for the cues they will use that drives behaviour and ultimately results.

No person can do everything, but every leader needs to tell those around them what is important, and in every business, there are always 5 things worth putting on the table as your priorities.

Cash flow.

Cash is the lifeblood of every business, without it, the business is dead. Too often I see little or no attention paid to the cash that flows into and out of  a business, the leader relying on the monthly P&L for the financial feedback. Cash flow and the P&L are different, they give a different picture of the health of the business. Both are essential, but neither gives a full picture of performance without the other. However, failing to actively manage your cash is akin to going swimming in the Alligator river.

Hire the best people you can find.

The mark of a great leader is to find engage and motivate people who are better than they are, even in their areas of strength. Delegate the things you do not like to do to someone who not only does it well, but who you can trust to give honest and considered feedback.

Focus.

Focus relentlessly on the manner in which the organisation delivers value to customers, and secondly on the development and deployment of the capabilities necessary to ensure that value is sustainable because it is able to evolve faster than the surrounding competitive environment.

Build a management rhythm.

Every business has a rhythm that dictates the order  and importance of jobs to be done. In my experience, starting with the macro, and working progressively to more detailed reporting and task allocation ensuring extensive feedback and adjustment loops along the way  is the most productive and efficient way.

Embody the culture you want to build.

The only person who can really change the shape of the culture in a business is the person at the top, so it pays to be very explicit about the culture you want to build. You need to talk the talk, while walking the walk, and be able to do  both without faltering, and with absolute consistency, in even the tiniest detail. We have all heard the quote  ‘Culture eats strategy for breakfast’ by Peter Drucker.  It remains absolutely true, and do not forget it.

Good luck, and have fun and build lasting personal relationships with those around you, after all, you only get one life.

 

The right tool is still not enough 

The right tool is still not enough 

Oct 30, 2017 | Change, Governance, Management

A huge impediment to effective and ultimately successful marketing is our obsession with the tools, especially the new and shiny ones.

My father was a very keen golfer who practised and sweated for years to get his handicap down to 20. One of his mates was a very good golfer, could easily do a round within 5 strokes of par with Dads clubs.

Same tools, different user.

Marketing tools are no different.

While every tool has its limitations, you would not use a sand wedge off a tee except perhaps on a very short uphill par 3, the skill of the user also has a profound impact on the outcome.

A tool is just an item that gives you leverage, able to do more with less, how much more depends on the skill of the user.

Every business uses a range of tools to deliver leverage, it is the means by which they scale. However, just having the tools deployed and at your disposal is nowhere near enough. The winners are those who extract the most value from them.

 

 

Will Apples ad barrier slow down Gooface?

Will Apples ad barrier slow down Gooface?

Oct 25, 2017 | Branding, Communication, Governance

In September last year (2016), Facebook conceded publicly that they had over-estimated the average  time viewers spent on video on their site by 60-80%. They did not tell us how long they had known of this ‘error’ but I suspect it was for  quite a while, as they aggressively pushed the ‘video first’ bandwagon.

It does not seem to have dented the volume of money going into the coffers of the GooFace (Google/Facebook) digital advertising duopoly, although it may have slowed a little after Mark Pritchard, the CMO of Procter and Gamble with an ad budget in the billions fired both barrels at the stupidity, complicity and fraud that underpins the digital advertising industry.

Digital advertising has been blighted not just by hype, hyperbole, fraud, but by tracking, and we know it is a blight, because something like 700 million devises now have ad blockers installed, and the big platforms are increasingly removing the ‘skip ad’ option that was initially in place.

GooFace make almost all their money from ads, and cross site tracking is a fundamental part of their arsenal, which they will protect at all costs. Making all sorts of claims supported by flimsy data, and more hyperbolic assertions (I suspect they will make tobacco companies look like beginners when they get a bit more practice) is to be expected. Apple  by contrast make almost no money out of advertising, so has loudly rattled the cage by announcing a new feature on an upgrade of Safari that  prevents cross site tracking.

Brilliant.

I wonder who will follow suit, as the march of subscription services without ads together with the blockers, must be biting deeply into advertising effectiveness, assuming we could see and analyse the data objectively.

Follow up Nov. 8, 2017.  Has the charm offensive stated?  This article in Marketing Week would suggest it has.

 

The getting of wisdom

The getting of wisdom

Oct 16, 2017 | Governance, Leadership, Management, Strategy

As I get older, the world seems smaller, more complicated, but smaller. This is not just the technology we all now have that has shrunk all the boundaries of our world over the last 20 years, putting the all the  information anyone has ever had at our fingertips, that is different.

It is one thing to have all  the information, it is quite another to be able to make sense of it.

There has been a progression from data to information, to knowledge that has been recognised and widely leveraged, but now there is another level to the cake, wisdom.

We all have access to the same information, can find those who have the knowledge to use it, but it is wisdom, born of experience and breadth of thinking that delivers the wisdom now so rare, but so sorely needed.

I like very much the philosophy of Charlie Munger who talks about mental models, ways of assembling knowledge and sifting through it, reorganising it to be seen from different perspectives that offer a different view. The more mental models you can bring to bear on a topic and body of knowledge, the greater the chance that there will be some insight that emerges unexpected from the model.

Charlie speaks of his mental models, and their source often, a man of few words, leaving most of them to his mate of 50 years Warren Buffet. However, in 1994 he wrote what has become a staple of business thinking , his ‘Worldly wisdom’ speech.

As a kid, we learnt stuff by experience, and using mnemonics,  devices to assist us to remember things. Rhymes, associations, colours can all play a role. Wisdom seems to me to be the opposite end of the mnemonic, the ability to see connections between seemingly unconnected pieces of information, and it is our mental models that enable these connections to be made.

By contrast what we have often these days are unrelated facts presented as a cause and effect, or a set of actions that worked in one place being expected to work in another, which may seem similar, but at a deeper level are not sufficiency similar to enable the actions to deliver the same outcomes.

We tend to be a society that believes, or wants to believe  in miracles, perhaps cargo cults, because it is easier than doing the hard thinking yards.

As someone who gives advice for a living, it is incumbent on me to have a clear framework from which to distil the information to have into advice that is tailored to the needs of those being advised. As often as not, the advice is not heeded, or taken in parts which sometimes hurts, as it reflects poorly on the end result, but it is the reality of making real change.

To be able to deliver the unwelcome news with confidence that it will hold, I need to have a range of mental models, models that come from the work done over 45 years in marketing, sales, operations, leadership, logistics and accounting, and be able to filter the information in front of me through the range of models in a routine and organised manner. Each model gives a slightly different interpretation of the facts, a different slant that requires consideration, so that each outcome is slightly different to the past, but best fitted to the situation to hand.

When you need a bit of wisdom, give me a call, perhaps I can help.

For context, vital in the consideration of Wisdom, the blurry photo is of a group of islanders in the Pacific at the end of the war. People on remote islands had become used to planes going overhead and dropping supplies to the troops. When the war ended, so did the dropping of supplies, an outcome not anticipated or understood by islanders. Physicist Richard Feynman gave it the name we all know: ‘Cargo Cult ‘in a speech in 1948. 

 

Is the supermarket business model developing terminal cracks?

Is the supermarket business model developing terminal cracks?

Oct 9, 2017 | Governance, Marketing, retail

Are the tiny cracks evident in the current supermarket business model just the beginning of what will become crevasses that will swallow supermarkets, or just annoyances that can be managed?

My view is the former, although we are currently a long way from Coles and Woollies being irrelevant to our lives, and as the dominating incumbents, they do have the option of anticipating and leveraging the changes as they evolve.

The current supermarket business model was built to leverage scale. That is its strength, the ability to centralise decision making and scale those decisions back through supply chains, and out into the consumers’ pockets. Scale has been the dominating characteristic of successful businesses since Alfred Sloan turned General Motors from a failing minnow into a monolithic hierarchical organisation in the 1920’s and 30’s.

The world however has changed.

Hierarchical organisations no matter how well optimised, cannot match the agility of local competition that is more organic in nature, adaptable in close to real time, and able to take advantage of the little cracks that result from the siloed management of the legacy organisation. They are simply able to adapt quicker to the changes in the competitive context in which they operate.

We see evidence of this all around us, from the turnaround in the US military capability under General Stanley McCrystal, to the organic growth of technology companies like Amazon and Google that are organised more as networks than they are as hierarchies, to the growth of local farmers markets, and pop up stores in the increasing number of empty retail spaces in suburban malls.

The siloed, hierarchical organisations of the 20th century have seen their best and are crumbling in the face of the changes in our ability to gather, curate and share information, and then act on it to create and deliver value.

While supermarket buyers optimise their net net prices with suppliers in return for mass distribution and shelf placement, local store managers are excluded from assembling a range optimised to their local buyers. By contrast, a local operator can optimise the range, but lacks the power to optimise the cost prices by virtue of their lack of scale, but that is changing slowly.

Then you have the innovations created by technology, the Amazon Go stores, exploding options to order and schedule delivery on line, the emergence of the ‘Internet of things‘ and artificial intelligence,  coupled with the social movements that are increasingly seeking product provenance as a purchase discriminator.

All this indicates to me that the capital intensive, centralised  supermarket is becoming a legacy model, just as the Department store is proving to be, demonstrated by the tsunami of bankruptcies in the US, and Myer in Australia announcing even more closures last week.

Photo credit: Gerard via Flikr