Sep 22, 2009 | Change, Innovation, Leadership, Strategy
There is a growing trend driven by the difficult times for management to set very big goals (Big Hairy Audacious Goals… BHAG),and hope to create the focus necessary to achieve the BHAG outcome.
Often however, the opposite appears to occur, as those in the organization charged with the execution of the plans simply do not believe the objectives are achievable.
Sometimes this is just that the objective is divorced from the reality of the competitive environment, sometimes it is simply a failure of leadership, but most often, it is just that the goals emerge from wishful thinking that puts off difficult decisions for a bit longer.
JFK said in 1961 “I believe this nation should commit itself to achieving the goal, before this decade is out, of landing a man on the moon, and returning him safely to earth. ” This is probably the most famous BHAG of all. It is a statement in a single sentence that contains the three elements of a successful BHAG. It creates the vision of where we want to go, the measures of success are clearly articulated, and everyone recognised the resources necessary to achieve the task would be made available, because the President had committed himself to the goal.
No room for wishful thinking or bland leadership in that statement, and it was achieved. Would it have been achieved, had any of the three conditions been missed? Probably not, because it would have just been the wishful musings of the President.
Sep 16, 2009 | Change, Innovation
Aggressive defense of the status quo by powerful firms, or a consortia of firms in some sort of industry lobby body often indicates a fat profit plum ripe for the plucking, or a closed shop that protects inefficiency. Perhaps they are the same thing.
Look at the defense of the record industry against the digital music revolution, the aggressive defense of the pharmacy drug (legal) distribution monopoly, the newspaper distribution monopoly (would you buy a newsagency now with the e-distribution of news taking over?) and the artificially high entry barriers imposed on new entrants to many professional bodies and you will see potential profit in the breaking down of the status quo, which protects someones easy life.
Usually, everyone apart from the defenders benefit when these strong guardians of yesterday are wiped away, as they usually are, with a greater level of pain than would be incurred if there was a sensible and creative discussion about alternative models.
In the end, all the lobbying does is create added waste and pain, and the chance to protect the profits of incumbency by innovation, and evolving the business model to better serve customers is lost in the determination to protect the status quo.
Sep 13, 2009 | Change, Innovation, Leadership
Transaction costs occur when you do something, opportunity costs, even harder to measure, occur when you do nothing.
Transaction costs are well hidden inside the activities that take place in your business, and short of introducing activity costing, are usually hard to determine with certainty. However, what is certain in every business I have ever seen is that they can be reduced, usually significantly.
It takes common sense, determination, leadership, and a willingness to break open the status quo to reduce transaction costs, none of which are easy, which is why it can be such a powerful competitive tool, your competitors will find it just as hard, and will often shy away.
Opportunity costs are even harder to measure, and usually it is only with hindsight that any measurement is possible, but then almost nobody wants to point out what could have happened if you had done something differently, and that is exactly why it is such a powerful concept to consider.
Ask yourself: “If we…………., what might happen?” as a part of your planning processes.
Sep 8, 2009 | Innovation, Leadership, Marketing
The first syllable of the word “innovation”, describes how most organizations see the process. Look inside the business for better processes, better science, better customer service practices, better product offerings. Problem is, that way you are always seeing the world from within the boundaries set by the status quo that pervades the business.
Looking at the world from another point if view, from the “outside” is usually a better way to create something new.
Innovation thinking from outside requires new rules about collaboration, and where you can get ideas, and it requires a special sort of leadership to enable an enterprise to activiely seek those who “do it” better than you.
Procter & Gambles A.G. Lafley reinvigorated the company by actively seeking ideas from outside the huge P&G innovation machine, recognising that most of the great ideas will be elsewhere, and the skill of the organisation is to recognise and commercialise them.
The German philosopher Gottfried Leibniz noted “we observe everything from a point of view”, and like much of his other writing, he was centuries ahead of his time, as the really successful innovators remove themselves from the shackles of the corporate point of view, to bring the outside inside their innovation efforts.
Sep 6, 2009 | Innovation, Leadership, Marketing, Strategy
Then notion of “industrial commons” as a metaphor for the clustering of firms of a similar type in an area put forward by Gary Pisano of Harvard Business School is immediately attractive, as it easily explains things we have all seen, without recognising the implications.
Pre industrial revolution, the notion of commons applied to the common land on which all villagers could graze their cattle, or carry out other communal activity.
In the post industrial age, it is about the manner in which particular skills assemble over time in a location that enables them to leverage the proximity of the intellect into goods and services. Silicon valley is the best known example, but there are many others.
This puts a simple platform under many publicly funded efforts to enhance “clusters” in my area of work, particularly in the production of high value specialty food products.
The growth of Orange in the central west of NSW as a fine food centre is supported by a wide range of agriculture, from broad acre cropping to intensive horticulture and wine making, further supported by mining operation which give some scale to the engineering services sector, and the University offering agricultural science amongst a wide range of disciplines. By contrast, nearby Mudgee has all the agricultural advantages, possibly more, but lacks the mining, university and the attraction to general tourism and passing trade, and so the clustering of food value adding has failed to gather the momentum of Orange.
The challenge in creating a “common” is the timeframe of the return on investment in the necessary infrastructure. Governments create and abandon a development program in sync with the electoral and economic cycles, commons will take a generation at least to gain traction, so governments should not be surprised to see their efforts largely fail, whilst next door, a “cluster” will evolve with little or no engagement of public funds beyond basic services, simply because it has all the natural conditions to thrive.
Aug 27, 2009 | Innovation, Leadership, Marketing, Strategy
The world will look different when it emerges from the crunch, as we appear to be doing currently.
The globalization and connectivity of the world are trends that will not go away, and the chaos of the last 12 months will have enabled trends at the fringe to build momentum much more quickly that would have otherwise been the case.
Consider the acceptance, even demand, for increased government intervention in business, something that would have been impossible a year ago, the growth of twitter over the same period, the role pro-active networking of supporters using the web played in the success of the Obama campaign, and the explosion of sales of “green” cars like the Toyota Prius, and Honda’s equivalent at premium prices during a financial meltdown. All examples of disturbance at the periphery of activity which became full blown disruptions at the core in a very short time, motivated during the economic chaos by people seeking new ways to understand and deal with what was going on.
Building adaptability has become a key survival skill, taking lessons from the natural world where many small “experiments” at the fringes builds the capacity of the species to survive as the environment changes around you. It may be that Peter Drucker‘s maxim that the only core competence needed by an organization was innovation has been reinforced, as all the literature on successful innovation cites the ability of an organization to run many experiments as a key component of innovation success.
Anyone thinking the post crash world will look like the pre-crash one needs to think again.
