Richard Nixon casts a long shadow

Richard Nixon casts a long shadow

May 22, 2017 | Governance, Leadership

 

In 1974 when Richard Nixon delivered his resignation speech, just before the inevitable impeachment, I was sitting in the home of Harvard Professor  Jim Hagler just outside Boston.

I was seeing first hand the implosion of a presidency from the perspective of a 22 year old Aussie who had by that time a pretty good education, but absolutely no experience beyond the surf, meat pies, beer  and university shenanigans that had been my life.

And yet, here I was seeing the anguish of Americans as they struggled with a presidency that had failed on the two counts that really mattered to them.

  • The personal qualities that it took an individual to be their President,
  • The  rule of law and order, let alone the constitution in which so many Americans are invested in a way alien to Australians.

The world has changed somewhat since 1974, but our expectations and hopes of leadership have not, despite the evidence of  the past 43 years, in both America and here in Australia.

However we still fervently hope and believe that our leaders are worthy, and when they prove not to be, we feel betrayed.

Trump has sowed the seeds of his own destruction via twitter.

He seems to think that behaviour that drives ratings as the host of a shock jock TV show is transferable to the office of the President.

Thankfully, it appears there is a difference after all.

Part of Trump’s appeal was I suspect that he was able to sell himself as a successful business leader and entrepreneur. Those skills that made him good at business would suit him to run the biggest enterprise in the country, the government, and bring some accountability to the bloated bureaucratic processes, without any of the baggage that comes with political and government experience .

Has not gone so well so far!.

If Congress was acting as a company board, as they should be, after all they are the representatives of the shareholders, they would be insisting on his resignation about now. The current rumblings of  an impeachment that will never happen because you need a 2/3 majority in the senate to ‘convict’  would be replaced in corporate life by one of those terminal conversations so loved on the ‘Apprentice’ TV show.

No CEO  of a competently run public company could survive the apparent conflicts of interest, loose mouth, inconsistent and shambolic behaviour, clear contradictions of positions taken almost in the same sentence, and outright lies that have characterised the first 4 months of the Trump white house.

We are better off here in Australia, but perhaps only just.

The spectacle during the week of various non entity politicians, along with several of some political status personally bagging Ken Henry as chairman of NAB when he dared to disagree with them, and articulate what any sensible person already knew, is a disgrace.

The treasurer a few weeks ago was encouraging political debate, encouraging the expression of views, and the first time it happens afterwards he and his colleagues go immediately for the language of personal vilification, ignoring the arguments.

On balance, I prefer it here, but what would we give for some genuine leadership without the shadow of self interest, power for its own sake, and sheer bloody-minded hubris?

7 ways to avoid a hiring failure.

7 ways to avoid a hiring failure.

May 3, 2017 | Governance, Small business

The small and medium businesses I work with are usually pretty wary of the recruitment consultants that chase them, promising to deliver the ‘Perfect ‘ hire for just 20% of their annual salary. They are usually seen, usually rightly, as just short term  ‘body shops’ that add little lasting value.

As a result I often get to have some input into the hiring decisions they make, as the ‘go-it-alone’ strategy using one or more of the on line job boards is becoming more common.

Taking on a new employee is a significant decision for a modest business. When it is a senior management decision it can be a make or break choice, and more often than not, once the gloss of the interview and enthusiastic references from the candidates friends masquerading as referees wears off, there are holes.

Making that right choice has two parts:

  • You need a realistic and detailed understanding of the job you are filling, its frustrations and challenges, along with the technical skills necessary to get the job done.
  • You need a good understanding of the underlying emotions, attitudes, and perspectives of the person you are considering.

Sounds simple, but we all know it is  not.

Over the years I have developed through experience and observation a set of personal criteria I look for when involved in this exercise. It is important for me to help get it right, as my clients rely on me for  the advice that is improving their businesses, so making a mistake can badly damage my position with them, and more importantly, compromises their efforts to change, and evolve the business.

The list has 7 elements, after the technical parameters of the job have been adequately addressed. All are hard to assess in an interview type Q&A, but can emerge in a more casual conversation, that is less about the role, more about the person.

  • Curiosity. In a world changing as rapidly as ours, domain knowledge cannot be static, so being curious about what is going on around them, about other people, technologies, environments, is a core part of a person who will continue to learn by absorbing new information, and keep being able to contribute.
  • Absorb blame while passing on praise. We have all seen the destructiveness of someone who does the opposite.  The ability to give credit for success, while making others feel ‘safe’ to experiment, think laterally, and risk failing is a powerful leadership quality.
  • Action oriented. There are those that talk, and those that do, and we all know which is the better. Being prepared to take decisions, often without perfect information, recognising not all decisions will be right, but doing something, learning as a result, and adjusting as necessary is way better than waiting for perfect information. Mixed in is a recognition that due diligence in risk assessment is crucial, the widely accepted ‘failure porn’ is to my mind destructive.
  • We all want leaders, but we usually hire managers, to get stuff done, to exercise organisational power. Far better to have a group who are able to lead without the authority, who inspire performance, and create an emotional commitment.
  • Prepared to prepare. Generally, the more preparation that is done, the easier things look. Playing football (Rugby, the heavenly game) in my youth at University, we had a coach who used to drive us into the ground at training. He used to say at least 10 times a session, ‘train hard, play easy’, a lesson that has served me well.
  • ‘CUR’. My personal acronym for ‘Cock-Up Recovery’. Everyone makes mistakes, except perhaps those who do nothing, so the measure of the person is the manner in which they recover, address the situation, and as the saying goes, ‘get back on the horse’.
  • Operate well under pressure. Let’s face it, life is a roller coaster of deadlines, demands, and crises, so being able to operate optimally under pressure is critical to good and consistent performance.

Keeping the conversation casual is important, and I usually end by asking something like, ‘what have you accomplished that makes you proud?’ In most interviews, no matter how casual, people default to what they do, or have done.  ‘Accomplished’ is a bit different, the word elicits a more personal response, something that may offer an insight into the person, and what is important to them.

 

 

 

Will your O-ring kill you?

Will your O-ring kill you?

Apr 10, 2017 | Governance, Leadership

We are all familiar with the notion that a chain is only as strong as its weakest link, it makes absolute sense.

However, not a lot of us have ever considered the idea that our weakest link could kill us, and yet, it can.

On January 28, 1986, the spaceshuttle ‘Challenger‘ exploded 73 seconds into its flight, killing the 7 aboard.

Challenger exploded due to a known fault, something that engineers had been warning about for some time, a faulty O-ring design. What is in effect a cheap rubber piece, a simple part of a hugely complex design proved to be the weakest link, and caused the catastrophic failure.

Everything else in the launch worked absolutely as per expectations and specifications.

The simple known problem, a cheap part, was the weakest link and  brought it all undone.

As you remove potential sources of variation from a process, the average level of reliability and repeatability of increases, and the tension in the system increases as a result. Therefore, when one link fails, the failure becomes more painful, obvious, and sometimes hard to fix. The management task is to identify the potential problem before it becomes one, and remove it.

That is why, at the core of the Toyota Production System, you have an ‘Andon‘ system, which enables anyone to bring a halt to a production process to fix a potential problem before it becomes a failure.

The Rogers commission set up to investigate the Challenger disaster, amongst a raft of findings was highly critical of the NASA culture that prevented the well known and documented concerns with the performance of the O-rings being addressed. Of particular concern was the performance of the O-rings in the cold weather that occurred during the night before the launch. The temperatures experienced on the night of January 27 were way below specifications, and there had been no testing done to gather data on what might happen under those conditions, and serious concerns had been formally expressed.

Had there been a simple Andon system in place, rather than a Byzantine hierarchical culture, the launch would not have proceeded, and the disaster been averted.

Your production processes may not be as life defining as those  in the NASA space program, but the principals remain the same.

Identify the weak points in the chain, and ensure there is explicit go/no go, or Andon points, that enable the inevitable process failures to be caught before they do any real damage. It may cost you some time in the short term, but will pay huge dividends in your ability to reliably and cost effectively deliver to your stakeholders.

Communication: Making it personal multiplies effectiveness.

Communication: Making it personal multiplies effectiveness.

Apr 5, 2017 | Governance, Marketing

Two weeks ago I received a piece of junk mail.

Not unusual, my letterbox seems to be the local junk repository despite a polite sign saying go away. However, as it was addressed specifically to me, with no mistakes in the spelling of my name, the  address was complete, and it was not a windowed envelope but one that was obviously not just a standard cheapie from Officeworks, so I opened it.

Open rates on old fashioned snail mail are very high, not the junk ‘To the Householder’ stuff,  the letters addressed to individuals.

By contrast, email open rates, the second best alternative for unsolicited mail vary from miniscule to around 10%, and  higher, depending on a host of factors with the common theme that the  better you know the recipient, and can direct the email to an individual, the higher the open rate.

Back to my story.

The note inside was short, printed on high quality paper,  and focussed laser-like on a specific pain point currently on my plate. The result is that they now have what their marketing person would probably call a marketing qualified hot prospect for the sales people to convert.

So what is the point of the story?

The process of building a brand, the conversion of awareness and of the value proposition of the brand takes a long time. It is a 10,000 piece jigsaw of individual actions by the marketers and reactions from those both in the target market and in the supply chain that delivers the product. At the end of it is an individual, in every case.

When selling a small value consumer item, you do so to an individual who makes a selection where there is little risk so some level of ‘autopilot’ decision making takes place.  Selling a power station is entirely different.  The transaction is at the end of a long process of selling to a series of individuals and probably committees of some sort , but at the end, there will always be someone with the right of veto.

A key part of the process is the impact the marketer has on the neural systems of the intended buyer, how the branding and selling efforts impact on their senses.

Human beings evolved over millions of years depending for survival on our 5 physical senses, and the 6th one, the ‘gut’ feel that comes from the experience of the individual, and of the ‘tribes’ in which the individual lives and works.

Logically, the more of the senses you can engage in a positive way when marketing to a prospect, the better your chances.

Back again to the direct mail piece.

All my senses had been successfully engaged by this piece of direct, unsolicited mail.

It engaged my eyes, as somebody had put a lot of thought into the visual appearance of the piece. It engaged my brain, as the headline and copy were clearly directed specifically a me, and to engaged me physically, as the stock on which it was printed was, like the envelope, clearly not a standard low cost stock, it was a premium quality  parchment type stock.

In the 30 seconds it took me to open, read, and understand this piece of unsolicited direct mail, the only option for me was to believe that somebody who knew me very well had specifically sent it to me in order to ensure I did not miss this opportunity to address the current pain point.

Depth of marketing to an individual prospect, building on years of building a brand with claims to quality and integrity, which is breadth, works.

The only point left to consider before I sign up is how  the hell they got so much detail in advance of sending the mailer.

 

 

 

The 4 levels of a successful business improvement project 

The 4 levels of a successful business improvement project 

Apr 3, 2017 | Governance, Leadership, Management, Strategy

My clients are mostly small and medium sized manufacturing businesses. They usually come to me when they are in a spot of bother, as word does get around.

Over a period of over 20 years of working with these businesses, a process has evolved. It is repeatable scalable, and can be applied to any business of any size. This is not because it is a complex set of algorithms that account for every contingency, just the opposite. It is a simple way of approaching a performance improvement project, that recognises the beauty of Einstein’s quote that “everything should be made as simple as possible, no simpler’

It is not rocket science, it is common sense, first principals.

My entry point is usually strategy, marketing & sales, or as I prefer to call it, ‘Revenue Generation’. The functional distinction these days between marketing and sales is utterly redundant. It never was relevant to customers, it just made the organisation chart easier to understand.

When someone is in trouble, and that is where I usually come in, the standard call is ’get more sales’. However, 9/10 times I see other things that need fixing, so in order to do that, I go back to the foundations, to the first principals of business.

In the end, Business is pretty simple, make and sell something for more than it costs you, and ensure the value to the purchaser is greater to them than the cost, and all will be well.

An improvement project can be treated as being in four parts, or levels, and each will contain numerous sub projects and elements that need to be addressed.

However, they need to be addressed in some sort of logical order, starting with the most urgent, as well as those that will deliver some quick returns. The quick wins are not just for commercial and financial reasons, it is because any change will inevitably be disturbing and potentially disruptive, so having a few quick wins makes the pain of change go away, or at least be more palatable.

Foundation.

These are the things that no matter what else you do, absolutely need to be done.

A lot of it is ‘underground’ as most foundations are, largely unseen, nevertheless, without a solid foundation, whatever else you build will  not last.

It is also true that the foundations wear out, become depreciated, and without renewal, which is a continuous process, you will still fail.

  • Basic financials. Cash management is essential, as cash is the oxygen of business. No business should be without weekly cash flow forecasting. The Profit and Loss statement measures your trading outcomes. It is less immediate than cash management, and gives a better picture of the items that are consuming and generating cash, so they can be managed appropriately. The P&L should be done monthly, along with the relevant performance measures against expectations in whatever form they have been articulated, usually a budget. The balance sheet is a picture at a moment in time of the performance of the business in creating or consuming wealth for its owners. These three basic financial measures are a part of the statutory accounts of any registered business, but a fourth that is not, is a simple measure of the break-even point in a business. At what point in trading do you go from loss in a period to profit. Knowing your break-even point is a bit like knowing when swimming if your nose and mouth are in the water, or out of it.
  • ‘Why’. Being able to articulate the purpose of your business is a huge competitive and cultural benefit that shapes the evolution it will go through. For those who have not stumbled across the various writings of Simon Sinek, it is time to start.
  • Business model. This is the means by which you turn your product into money. The foundations of a wholesaler will be different to those of a retailer, or on line supplier of products. The way you build the foundations will similarly be different. Different business models do not easily mix in the one business. Barnes and Noble should have invented Amazon, not been put out of business by them. Similarly, Blockbuster was in the prime position to invent Netfliks, not become their victim.
  • Regulatory requirements. These are a do it or be prosecuted choice, which for most is no choice at all, but you would be surprised how many businesses I walk into that are (mostly) unknowingly breaking the law. If you are running a child care centre, better get the regulatory stuff sorted!
  • Operational capability. Setting out to run a business, you need to be able to deliver a product of reliable quality, on time, and in budget, that delivers value to the customer. Pretty simple, but I have seen many business plans that seem to think that a product will come about like manna from heaven, just because it is ordered.

The advent of digital has changed forever the manner in which you approach a number of these elements and I would contend, is continuing to change them, almost weekly. I was tempted to put digital capability as one of the Foundation elements, but digital is a bit like breathing, you do it or you are history.

 

Revenue generation.

Commonly called Marketing & Sales, but as noted the distinction is redundant.

No business survives without revenue, and it is my view that all  the processes aimed at generating that revenue, directly or indirectly, should be seen through the one lens.

Marketing is a huge topic, way too much for a single blog post, but there are some basics that should be clear.

What is the profile of your ideal customer, How do you find and engage them?

What is the value proposition, how will the customer make the choice between your product and the alternatives, How will you go about building a brand, what are your best distribution channel options, which communication channels and platforms do you use,  which customer profiling methodology, lead generation and conversion, NPD & C, customer service, Strategic key Account Management, value proposition, advertising, market research,  and so on and on and on.

I ‘bounce’ between revenue generation and the foundation activities. While you have to have the foundations in place, you also have to be generating revenue to pay for the investment, one without the other is still a ‘fail’. Therefore there is a continuous and parallel improvement in both, it is not sequential, it is a parallel journey.

One of the traps of all the digitisation that has taken place in the revenue generation space is the sudden availability of new shiny toys to play with. Each in its own way promises to deliver at least some part of the silver bullet you are seeking. The temptation to chase the newest shiny tool is overwhelming for many, but also equally daunting for many others. The right mix is somewhere in the middle, as usual.

Identify the tools that solve your problems in the manner that best suits your strategic and financial objectives and limitations,  without losing sight of the foundations of your business, and you will be OK. Being seduced by the tools is as bad as ignoring them.

 

Leverage & Scalability

This is where the fun really starts.

We all understand the concept of leverage, of doing more with less. The tools available in the revenue generation space give you leverage in your current markets. They also provide the opportunity to leverage capabilities outside your immediate markets and customers. This sort of leverage can be applied geographically, to adjacent markets and customers, in new value propositions, new technologies, and to gain a decisive advantage over competitors.

Having built a stable and profitable business by solid achievement in the foundations and revenue generation stages, you will free up the time to enable the leveraging and scaling of your processes, assets,  capabilities, collaborative demand chains, and importantly spread your process improvement successes wider.

 

Sustainability.

Commercial sustainability is the rarely stated, but often considered objective of all this commitment. The best metaphor for this stage is nature. As the environment changes, the organism evolves to accommodate and leverage the changes to its benefit, and this happens without added effort. It is commercial evolution at work.

This is the vision painted by so many of those trying to get into your pockets, of the 4 hour work week, taken remotely while on an island paradise collecting magically recurrent income. It never happens, at least I have never seen it. Even those who claim to be making millions via the web selling all sorts of dreams, are doing more than they tell you. It is true that web based products, a new  commercial option still only a decade old have made a huge impact, and there are a few who have made it big, but they are as rare as those who made it big in manufacturing in the last century were. Nevertheless, having a goal of sustainability in your sights, and working towards it will see your business prosper, and you will be able to enjoy the fruits of that prosperity.

So what now?

You can only do a very small number of things at once.

Therefore where I start is with a ‘StrategyAudit’ where I go looking for the holes then prioritise them into an action plan, and gain some sort of agreement  that the plans will be followed. A realistic assessment of the current situation is an absolutely crucial first point of any improvement project that offers the genuine chance of enhanced performance.

 

10 sources of motivation you can leverage

10 sources of motivation you can leverage

Mar 31, 2017 | Governance, Leadership

It  happens that one of the regular issues emerging from conversations with those I work with is about how you develop and maintain the motivation of those in the business, particularly in the more operational roles.

Over the years I have seen a lot of operations, manufacturing and other wise. Sometimes as you walk in the door, you can just ‘feel’ the energy, other times, it is clearly a place everyone would rather avoid.

Some of the common factors in the good ones I have seen follow, and the absence of these factors is also apparent.

Motivation is contagious. A few of the right people, clearly motivated and excited to be there, and doing a job well has a huge impact on a workplace. It is even more contagious when it comes from the ‘ranks’ as everyone expects the boss to be motivated,  but not necessarily the storeman.  Seek out those people in your recruiting, and celebrate them.

Motivation builds momentum. While it is contagious, it also builds its own momentum. The hard bit is getting started, to get the ball rolling, then it tends to feed on itself, so long as the environment provides the nourishment.

Urgency creates motivation to take action. We see this every day, particularly in a sales context. ‘One day left’ ’24 hour special’ . Inside a business this urgency is used to get attention, make change, and create alignment to a course of action.

Motivation and optimism have a strong link. Having a workplace full of optimists, those who see the bright side, who feel ‘alive’ and communicate that feeling has a positive impact on the ‘motivation quotient’ in every workplace I have seen. The converse is also true. There is also a strong social component, when a few of those seen as the leaders in any place of work, and these are not necessarily those whose place in the organisation chart says they are the leaders, are optimistic and motivated, that has a clear social effect. I am sure the wallies will have a fancy name for it. I just call it the ‘social effect’, and seek it out when hiring.

Motivation is also individual. Having noted the social effect, every person is motivated by different things, and differently in different contexts. It is a very personal thing, often a choice made consciously at some point, that just becomes ingrained. it also means that an effective leader manages their relationships with each of their fellow workers in an individualised manner.

The environment creates motivation. This may often be called culture, the ‘Way things get done around here’, to quote Michael Porter. Again, it is a social component of the workplace, something that is never articulated on an organisation diagram, but which nevertheless has a profound impact on performance.

FOMO. Fear of Missing Out is a well understood and deeply research psychological factor. It is a strong motivator, way stronger than the prospect of gaining something by participating.

Coercion and manipulation are not motivation. Indeed, if anything, they are strong eroders of any intrinsic motivation felt by individuals and a group. We are very good at picking when they are being applied to us, and we resent it and react accordingly.

Scarcity creates motivation. Scarcity, just like urgency, acts to motivate action now. ‘Only 2 left’ is a common tactic. Now emerging often is the non recording of webinars, so if you do  not catch it live, there is in backup.

Risk creates motivation: for some. Every now and again, we watch someone who takes risks, and do not understand why they do it. When asked, the answer is usually some version of  ‘because we can’, or ‘because it is there’. Just as most of us would not consider trying to ride a wave as clearly dangerous as the one in the header photo, chances are the bloke in the photo went out again, after recovering from the impending huge wipeout. It is intrinsic to the individual

Finally, money is a lousy motivator. People want to be valued and acknowledged, on top of having a pleasant and productive workspace, able to shape the way they spend their days. When that is in place, money is secondary, but in the absence of those things, money becomes the only motivator and when it happens, you are in deep trouble.

 

Photo credit: Mobilqajmd via Flikr