Jun 26, 2013 | Change, Innovation, Leadership, Marketing
Across all my activities, I hear management talking about the “next big thing”, the importance of innovation, of being different, creating new product platforms, and striving to be disruptive, but settling for a change of colour, flavour or pack size.
After a long time at this, it seems there are a small number of very consistent reasons that show up, usually in multiples.
1. Incremental is easy. It is easy to be incremental, but true innovation is really, really hard. Not only do you have to come up with the ideas, but you have to sell them internally before you get a chance to take ideas to the market. Taking yourself, and the enterprise outside its comfort zone is a major exercise in leadership, and there simply is not enough of it. On top of that, it is hard to get a budget for stuff you have little idea about, the discounted cash flow analyses, even if they are at the push of a spreadsheet button, carry way more corporate weight.
2. Human beings are risk averse. We like the stable, familiar, and predictable, and shy away risk. Daniel Kahneman co-authored a 1979 article which won him the Nobel prize, that put numbers around the notion of risk reward. When offered the choice of $1000, or a 50% chance of $2,500, a majority take the money and run.
3. It really is so easy to say No. Finding reasons not to take a punt is really easy, there are usually many on offer. By contrast, it is difficult, risky, potentially personally expensive, to say yes, and you have to keep on saying it, confirming and reconfirming the project in the face of the naysayers. Corporations of any size larger than 7 people are hierarchies, and consequences of decision making are social as well as commercial. Few people are prepared to be seen to make a mistake, and most will avoid the possibility like the plague.
Every organization needs some sort of balance, a discipline of culture that regulates the manner in which they behave. It is in the way the balance is struck, and the behavior that is favored where the innovative enterprises have the edge. Everybody has the same(or similar) access to the market for ideas, good people, technology, and all the other inputs necessary apart from the fundamentally important one that is internal, the culture of the place.
Safe nowadays is the new risky, so get off the fence!
Jun 13, 2013 | Collaboration, Governance, Innovation, Leadership, Strategy
One of the most famous photos ever taken, above, is of the 29 Participants in the 1927 Solvay Physics conference. The astonishing thing is that of the 29, 17 were Nobel prize winners, lauded busy people, so how did they get them all together at the same time?
Relatively easy, as at the time the photo was taken, only 3 had already won the Nobel prize, the other 14 won in the years after the conference, so were mostly unknown outside their research domain. (One of those who had already won was Marie Curie, who is also the only person in the photo to have won the prize twice, in different disciplines)
The point is that assembling this group, the organisers were not looking backwards, they were looking forward, to those who would make, rather than had already made a huge contribution to the topic.
Next time you are considering the personnel to go onto a project team, seeking to define your role into the future, or just operating a day to day activity, exercise the same forethought, and open the opportunity for great things.
Jun 6, 2013 | Branding, Demand chains, Innovation, Marketing, Small business
Coles limited engagement in an “anti factory farming” campaign is indicative of the strategic and marketing tightrope the food industry in this country is walking.
On the one hand we have an effective duopoly of FMCG retailing exercising their power to increase their returns to shareholders, and service their customers by both maximising margin and minimising costs. A core part of this strategy is to absorb the proprietary brand margin by aggressively allocating shelf space to housebrand products that are just globally sourced copies of the proprietary Australian products.
On the other hand we have an Australian dollar that has effectively given a 50% price subsidy to the international competitors to the Australian supply chain, at a time when all other domestically sourced input and overhead costs from labour, power, various rates and taxes, freight, and risk costs have all increased substantially. Double whammy!
An added complication is often that the (usually young) buyers in the retailers take the “fast moving” part of the FMCG literally, and fail to recognise the time and investment often required to reflect even a minor change in their product specifications through the supply chain. The consumer end may be fast moving, but when it takes 7 years to mature a fruit tree, and many generations of animals to reflect spec change in the end product, it can be anything but fast moving.
Now Coles have, quite legitimately, moved to build a sort of “animal provenance” into their produce supply chains, as a competitive positioning strategy against Woolworths, increasing the costs of their suppliers, as well as requiring added investment by suppliers for which they need a reasonable chance of a competitive return. This is at the same time they have reduced consumer prices substantially (consumers have been very grateful) in some markets like milk. Whilst Coles, and Woolworths who followed them, may have sacrificed a bit of margin, the supply chain has borne the brunt of it, despite some spin to the contrary.
The small guy has little chance of succeeding against these odds unless he is very smart, and does not have all his eggs in the chain basket, as just competing on the grounds dictated by the chains is a no-win choice.
There are however, strategies that can be deployed to succeed, but they require a re-engineering of the supply chain into a new beast, a Demand Chain that is driven by consumer demand, not supply, and is managed through a chain “community” where information is shared, and is agnostic in some way of the power of the big chains.
Having been a bit gloomy so far, it is however encouraging that the big two retailers are now differentiating themselves competitively, as consumer niches that can be accessed by agile and innovative suppliers. will evolve.
PS. Just after posting, it was announced that Simplot had put its Bathurst and Devenport plants into a wind-down for closure, and McCains had cancelled potato contracts with three big growers. if we needed more evidence of the parlous state of food processing, it just arrived.
Jun 5, 2013 | Innovation, Leadership, Management, Strategy
I was struck by a line in a terrific blog post by Ian Leslie I read that said ” Google can answer almost anything you ask it, but it cannot tell you what to ask”
It is totally counter-intuitive to consider that the power of the web is now narrowing our horizons, and that by succumbing to the lure of the algorithm, we are dismissing the beauty of serendipity, that unexpected discovery, the thing we would never have seen were it not for “right time, right place”. It does not seem to matter if it is a scientific discovery, Fleming recognising that the growth on his slide was killing all the bacteria around it, or just finding a book in a bookstore that is “right” somehow, these thing s cannot happen on Amazon, or in isolation.
The question then becomes how do you create serendipity?
You need to be messy, cross- functional, collaborative, iterative, and work with an open mind, as well as applying discipline to the scientific method of process improvement, practicing what I call Loose-tight , or ambidextrous management.
This ambidexterity is not easy. It takes leadership, an enabling culture, and a deft hand, but the results speak for themselves. Combining the ability to mine the accumulated knowledge of all of us, with the creativity inherent in human nature when it is open-minded and free to make non linear connections will eventually lead you to ask the right questions, and reveal what you do not know.
Once you see the question, serendipity has a chance.
May 10, 2013 | Innovation, Small business
Yesterday, watching a bee that had snuck in my office window trying to get out, I was reminded of a simple fact that to my mind is a great metaphor.
Put a few bees in a bottle, and point the bottom towards a light source, and the bees will all belt themselves against the bottle bottom, never finding the open end. Flies by contrast buzz around at random, and eventually will, by luck, find their way out the open end.
Running a portfolio of R&D projects is a bit like having a lineup of bottles full of bees.
For some bottles you need to have light very focussed at one point, in order to concentrate the effort at that point, others you need a wider light source to enable a wider scope of activity, and others, you need light all around, with one small exit, so that eventually the disciplined bees will find the opening, and escape.
If all you have in the bottles are flies, exercising discipline is a pointless exercise, as flies just buzz at random irrespective of external motivation. You need bees, and multiple potential light sources.
Getting the right mix of disciplined process and the connection of the apparently random dots that make the “wow” moment is the core task of those running a portfolio of projects.
May 1, 2013 | Communication, Innovation, Social Media
20 years ago yesterday, April 30 1993, CERN, the European Organisation for Nuclear research, the developer of what has become the W.W.W. announced that they would open it up, making it free to all by posting the codes on what became the worlds first website.
A computer based communication system had existed since 1985, when the first “domain” name had been registered, but it was the private property of individual universities and research organisations.
To my mind, this single action by CERN management in 1993 was the catalyst for the revolution we have undergone in the last 20 years, and which is still continuing, and this revolution (I am looking for a stronger word than just “revolution”) is at least as significant as the realisation that steam could be used to drive machines, and you could set up a system to mass produce the printed word.
In a number of TED talks over the years, there has been some extraordinary contributions to our understanding of the impact this decision has had.
Clay Shirky has mused about the brainpower released, the cogitative surplus, by the web, Kevin Kelly makes observations and predictions about the development of the web, and Ray Kurzweil wonders at the continuously accelerating pace of innovation that is occurring. All have made the point that the world has changed.
Tim Berners-Lee, now Sir Tim, was the man. He wrote the protocols that underpin the web HTML, et al, while working as a software engineer at CERN. The project was a part time indulgence, a side project, but then it went public.
To my mind, this is almost equivalent to the Big Bang, the day the world started, anew.
