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 4, 2020 | Change, Innovation
Robust ecosystems have points of balance; change is incremental, competitive, and evolutionary, leading to a revised point of balance.
When a species becomes dominant, that dominance becomes the source of weakness over time, as evolution requires responses to changing circumstances. A dominating player in any system resists change, as that involves increased levels of short term risk, and dominating players are generally risk averse.
Occasionally, an unpredicted catalyst appears, throwing the rules against the wall. Established incumbents fail to evolve quickly enough to accommodate the changes and survive. This is as real a process in commercial life as it is in the natural world.
The introduction of rabbits and the cane toad into Australia’s ecosystems have had the same impact on the pre-existing status quo as has the evolution of the microchip has had on the commercial world. The microchip unleashed a series of innovations for which the pre-2000 economic ecosystem was unable to recover. The now dominating players were little more than single cell commercial organisms, and many did not exist, at the change of the centuries.
Commercial ecosystems are no different. There will be times of consolidation based on the strength of the balance sheet of the dominating players. This becomes the source of weakness as they become locked into the status quo which produced them.
It is pretty clear to me that there are 4 stages in the commercial development of a market:
- Start-up stage. One player emerges, that effectively redefines a market in some way, followed up quickly by a series of fast followers. This is normally generated by some sort of catalyst, unanticipated by market incumbents, and leads to what is seen at the time as unprecedented periods of growth. Think Ford, General Electric, and those around the move from the vacuum valve to the microchip, from Allan Turing during the war to Gordon Moore in 1965.
- Scaling stage. The new players fight for dominance, with most of them going to the wall, while a small number, scale and consolidate to a position of dominance, if not monopoly. Think social media, web browsers, mobile computing.
- Leverage for profit. The new ‘kings’ leverage their dominant position for maximum returns, optimising processes, and minimising risk in pursuit of profitability. Facebook, Google, Microsoft and Amazon are all following this pattern.
- The cycle repeats. A catalyst appears that changes the rules of the game, again. Some may survive in a different form, others will disappear.
This is a Darwinian process applied to our economic and commercial ecosystems. Charles Darwin’s much quoted musing in the header applies as much to commercial systems as it does to natural ones.
The speed of change, enabled by digital technology has concentrated the cycle time from decades to a few years, and now arguably, a few weeks. It took 30 years for the vacuum tube to morph into scalable microchips, a decade for the early versions of the net to enable distributed computing, and a couple of years for that to create a system that might support new communication tools. Then, Facebook created a new model that blitzed the competition and led to absolute domination of a new ecosystem. A similar story led to Amazon, and Google, while Microsoft, the monopoly operating system player of the 80’s and 90’s, threatened with anti-trust breakup, evolved with incredible speed and agility into something new.
In the last few months we have seen examples of businesses and institutions that have evolved at a pace unimaginable a year ago, to face the challenges of Covid.
It may be fanciful, but it seems to me that market dominance contains the seeds of the dominators own destruction. This is a pattern followed not just by companies from Wedgewood, the British East India Co, Ford, GE, Microsoft, but to countries. Rome, China, Britain, and dare I say it, the US, while China is rebounding.
I speculate that this is the result of the crushing of opposition, and resulting lack of ‘genetic’ diversity that occurs as short term risk is minimised while profitability is maximised. Lack of diversity in the commercial DNA leads to commercial vulnerability, just as in the natural world
Ford ‘invented’ the modern version of the production line, (the Venetians had it first in the 1500’s) but could only make one type of car, so GM ran over the top of them with choice. Kodak dominated photos, but they defined themselves in a particular way, and despite being the ones who invented the virus that would kill them, digital photography, they failed to evolve. Same story with Blockbuster. They absolutely dominated global video rental, defining themselves as video rental stores. The then CEO John Antioco put in place a strategy that anticipated the growth of subscription streaming services. Blockbuster even had the opportunity to buy Netfliks at a give-away price at the time. However, the board, dominated as it was by those whose sole interest was short term profitability, got rid of Antioco, and the strategy that may have saved them as a significant if not dominating player. They actively rejected the opportunity to evolve, signing their own death warrant.
On each occasion, in each domain, there has been some sort of catalyst that has led to the demise of the dominating enterprise.
It seems to me that this current Corona crisis is another such Darwinian catalyst?
We have already seen many businesses struggling, and many ‘hitting the wall’ and I suspect there will be many more, while some, mostly smaller and more agile businesses are doing very well. Question is, will a few of the dominating enterprises fail the test of rapid evolution, and disappear?
I am prepared to bet that many will, and be replaced by businesses we have not yet heard of, that are able to deploy digital tools in almost real time. Just look at the manner in which Zoom has been able to harness the opportunity, blowing away incumbents like Microsoft.
Dec 6, 2019 | Innovation, Leadership
Telling the future is a practise best left to the circus tent, but as strategists we are doing it all the time.
The question is not how to avoid being wrong, which means you do exactly nothing, but how do you both increase your odds of being right, and be able to pick very early when you are going to be wrong.
The leadership task to be able to play in the future is to decrease the natural discomfort people have with change, to seek ways to reduce the power of the status quo, look for opposing views that deviate from those that currently drive decision making, and ensure there is diversity of ideas and types in the environment.
Building a resilient marketing and innovation culture is at the core of this challenge. This recent Gartner report covers the challenges well, observing:
‘Innovation is well funded and maturing as a marketing discipline. CMO’s are dedicating head count to innovation and leaning on ecosystems to help accelerate initiatives. despite the progress, obstacles remain, most notably risk-averse corporate cultures’.
None of this is easy. It requires active engagement with the threats you see on the horizon, not just from your immediate environment, but from the wider field that may influence your enterprise in the future. It is being able to see threats as the opportunities they can be.
As a leader in this sort of change environment you have to be able to make it safe to be wrong, to encourage the pursuit of rabbits down burrows, to learn quickly, and adjust on the run, unlearn the ways that have been successful in the past, and replace them with less proven ideas and processes.
To my mind, curiosity, the absence of fear, and the leveraging of data, are the key ingredients in all this.
Curiosity is a word that encompasses all sorts of things, from critical thinking to creativity and discovery skills, and so called ‘design thinking’ which is just a fancy term for starting with a clean sheet of paper to design something new from scratch, completely from the end users perspective, while leveraging the best parts of what currently exists. To make all this happen in an organisation also requires that there is a collegial culture, as nobody can do it on their own, you need teams and networks of collaborators to succeed in todays world.
The second component of predicting the unpredictable is data. Data can reveal patterns, correlations, cause an effect relationships that when seen through a new lens can deliver imaginative insights. It is also true that we have no chance of predicting what an individual might do tomorrow, but assemble a number of similar people together, and we can have a very clear picture of what the majority of them might do tomorrow, and a calculation of the odds of outliers.
The third, which Hugh McLeod nails, again, in the www.gapingvoid.com header cartoon. Innovation is the absence of fear, and only in the absence of fear can we be sufficiently curious and empowered to predict the unpredictable, and bet on it.
Dec 2, 2019 | Innovation, Strategy
My sister is a gardener, a producer of a prolific mass of colour and edible plants year round. It takes work, time, and planning, but as they say, the proof is in the pudding.
By contrast, most businesses I work with have a strategic process that starts with a workshop, or some sort of off site involving senior management, sometimes a few more junior and high potential managers, and perhaps an after dinner speaker to liven things up.
Generally the outcome is pretty bland, little more than an articulation of what the CEO or board thought they wanted when walking in on day 1.
Contrast that to my sister.
She does not do her gardening by digging.
She is constantly absorbing ideas and lessons from those around her who are also gardeners, what worked, what did not, and why. She absorbs information from wherever it comes, and then sets up trials to see small scale outcomes before making any commitment to turn over a chunk of her extensive gardens to something different. When all that comes together, she has something different and surprising, she will take the leap and expand the planting, continuing to learn as she goes.
She has a good idea of the outcomes before she commits the time, energy and cost that it takes to commit a chunk of her garden to this new thing, because it has worked in a real world test.
Not so the strategic processes of most.
There is little energy spent thinking about the strategic, competitive and regulatory environment in which they must succeed, little time and effort spend learning from others, and little appetite for small scale trials that might give the game away to competitors.
My sister succeeds on micro scale before investing in the macro, and it is a continuous process, not one that takes place at a specific window of time in spring, but rolls continuously through the year.
Perhaps gardening is a better metaphor for strategic development than it would appear at first glance.
As an aside, the current drought in the country town where she lives has delivered some nasty and unexpected surprises. All are being met with a mindset that will see the important parts of her garden survive and thrive again as rain reappears, as it will. She will have learnt much from the experience.
Nov 4, 2019 | Governance, Innovation, Strategy
It is a confusing world.
On one hand, change is everywhere, and the pace of change is increasing as we watch. On the other, generating change in an organisation is really hard; we humans do not like change, despite what we sometimes say. We are hard wired to resist it in the absence of a compelling reason, some set of circumstances that leaves us absolutely no option.
In the 50’s, psychologist Solomon Asch ran a series of ground-breaking experiments where he showed the power of conformity.
He shows a group of subjects two cards, one with three lines in it of different lengths, the second with a single line. The question was, which of the three lines on card A was the same length as the line on card B?
He would go around the room, asking the question, and each person successively deliberately gave the wrong answer, until he got to the last person, the only real subject in the room. In an overwhelming majority of cases, the last person agreed with everyone else to the obviously wrong answer.
We are hard wired to conform, to agree with the group, to avoid being an outlier, even when the group is wrong; we still find it hard to do anything other than conform.
Evolutionary psychology at work.
Being outside the safety of the group, where cooperation added to the odds of survival, you conformed or you were expelled from the group, which meant you quickly ended up as sabre toothed tiger shit.
Not an attractive prospect.
There are not too many sabre toothed tigers left around, but the safety of the group is still a driving force in our behaviour, so we have to change the mind of the group.
- Create a catalytic event. When confronted by a crisis, where the status quo has clearly failed to deliver, change is suddenly made easier to implement.
- Identify the opinion leaders in the group; convince them, let them do your persuasion work for you. ‘Local’ networks and opinion leaders are very powerful as change agents. Conversely, they are in a position to block any change they do not like.
- Identify a ‘keystone’ change, one that forces other changes, that that clearly demonstrates the value of wider improvements that can be achieved. Managing a manufacturing business as a contractor, we had an assumed capacity problem, that necessitated long runs to inventory to service demand. The result was slow inventory turn, redundant stock that could not be sold, and excessive working capital, all problems stemming from the capacity limit. On analysis, the real problem was in the scheduling of the production process, which created a bottleneck at a key piece of machinery. This was solved by rejigging the timing and order of activities, changes that were strongly resisted by staff until a mandated trial clearly demonstrated the substantial productivity benefits that accrued. This one change led to significant improvement in almost all other productivity and financial KPI’s.
- Create stories that the group members can relate to, that demonstrate the costs of no change are greater than the risk of change. The story related above took on a life of its own, as the staff involved rewrote history, by assuming the responsibility for suggesting and driving the ‘keystone’ change.
- Have great clarity about the benefits of the outcome after the change, how it will be achieved, and the benefits it will deliver. Again, the story above had a knock-on effect through the business, as the results of the improvements were made very public, and credit given to the staff involved.
- Embed the changes into the operating psyche of the organisation. Culture is elastic, and unless the binds of the past are comprehensively broken, they will spring back once the pressure is released.
Lemmings are persistent creatures, if not too bright. Put a barrier in place in front of the cliff, and they will climb it, unless there is an alternative path that is made to be more attractive in some way leads them in a different direction.
How are you disrupting the Lemming Effect in your enterprise?
Cartoon credit: Mike Keefe Denver Post.
Oct 16, 2019 | Governance, Innovation, Strategy
Goal setting and the subsequent resource allocation decisions taken to address the goals are an integral part of every management job, no matter where on the organisational totem that job stands.
Setting goals appropriate to the level at which they are being implemented is a function of being appropriate for the level, as well as ensuring they are consistent and aligned with the overall goals of the organisation.
The greater the degree of alignment, in conjunction with the greater the degree of relevance of the goals to those at every level to which they are being applied, the more effective they will be.
‘If it cannot be measured, it does not matter’. I subscribe to this idea, first articulated by Peter Drucker, with the simple caveat that it is not always right. As Einstein said, ‘not everything that matters can be measured‘. For example, How do you measure the value of good parenting? We all know it is good for the individuals, and the community, but what are the objective measures of good parenting?
It is also important to make the distinction between goals and KPI’s, which are simply the signposts along the way towards goals by which you measure progress. Confusion of the meaning of these two terms is common, and destructive.
The acronym SMART was used a lot in the past to set the goals of an enterprise, function, teams, and even individuals. It seems, unfortunately, to have gone out of fashion. Perhaps because managing objectives in such a way increases accountability, which might just be a good idea!
Specific. Be very specific about what the objective is, no fluffy words, no ‘get out of gaol’ card. What is it exactly that you want to achieve?
Measurable. What are the measures to be employed that will chart progress towards the goal, and most importantly, tell you when you have achieved it
Achievable. Do you have the capabilities required and the cultural and performance frameworks that will enable the achievement. Is everyone on board? It is hard for employees to strive to achieve an objective they do not believe in, or think is unachievable.
Relevant. The goal is consistent with the overall strategy, and contributes to the delivery of that strategy.
Time-bound. Deadlines drive performance, and highlight activity priorities. The overall goal end point needs to be agreed, as do the key points on the journey
The poster boy for a SMART goal was JFK’s 1961 goal of landing a man on the moon and returning him safely by the end of the decade.
Header photo by NASA. Astonishing to think it was 50 years ago, I remember it like it was yesterday.
