Apr 14, 2025 | Change, Communication, Governance, Leadership, Marketing, Strategy
When you look you see Hofstadter’s law around you everywhere, every day.
We all understand Murphy’s law, which accurately states that is something can go wrong it will, probably at the worst time. Murphy has a sibling, articulated by Douglas Hofstadter which states: ‘A task always takes longer than you expect, even when you take into account Hofstadter’s law’.
Planning is a part of our lives. Some things are easy to plan, the consistent characteristic of these is that there are very few variables over which you do not have control. For example planning a trip to the supermarket, you can check what you need you control the time, the choice of supermarket, where you park, how you work the store, the choices you make between brands. Very few uncontrolled variables.
By contrast strategy is an exercise not just in predicting the future, but then making choices how best to deploy your resources in a way that enables you to shape the future to your benefit by exerting some influence over the range of variables over which you have no control.
Entirely different challenge, as there is never an explicit ‘right’ answer.
When we talk about strategic planning we are effectively mixing two incompatible factors. The uncertainty of the future and the forces over which we have no control, and the certainty of the resources we have to deploy, with uncertain outcomes.
Currently in this country we have a huge black hole called defence planning into which billions of taxpayers dollars are being poured, in the mistaken view that we are able to predict the future and therefore plan as if we could control the variables.
The better way is to have a robust strategy which enables flexibility in the way assets are deployed short term.
Projects tend to expand to fill a time available, while at the same time we habitually underestimate the time that is required to complete any given task, no matter how rigorous we are in the planning.
Mar 26, 2025 | Governance, Leadership
A question I always ask my clients is “what would a VC firm do if they took over management today?”
It always leads to deep and challenging conversations. It enables discussion that recognises the complexity of the strategic and tactical environment in which we all compete to live.
In a world changing as rapidly as the one we now inhabit, there is no such thing as a safe haven based on previous success. Nothing will remain unchanged over the coming decade.
The lessons we can learn from 30 years of VC activity can be used as a trigger for existing management to realign and regenerate for the future.
The question should be asked from two perspectives, as the answers will be different.
What changes would a VC firm make to the business?
Would I survive such an invasion?
Venture capital (VC) firms evaluate businesses through a rigorous lens, and when assessing a previously successful business facing headwinds, they focus on key indicators to determine whether it’s worth investing in, restructuring, or passing on entirely. Following are 14 of the obvious questions a VC would ask.
- What are the revenue, gross margin, cash flow, and profitability trends?
- What is the competitive position you hold? Is it differentiated and competitively sustainable?
- How would the culture be described?
- What is the picture of your current customer base, and prospecting success?
- What are the current driving forces in the market, and are they likely to persist?
- How does your business model work? Is it resilient and/or ‘pivotable’?
- What does the long term past look like? Is it smooth and cyclically predictable or erratic?
- Are business processes defined, consistently applied, and subject to continuous improvement?
- What is the quality of existing and future leadership and management?
- Are there any regulatory or legal risks?
- Does the business have potential for strategic development via M&A, takeover (taker or takee) or alliances?
- What is the ‘risk profile’ of the business? Ie is it an innovator, follower, or stuck in time?
- Are there valuable personal relationships in play?
- Exit potential for investors?
There is no reason to limit that conversation to a business, why not apply it to yourself?
‘If a gun young engineer/marketer/salesperson, (whatever you do) walked in today, and sat in your chair, what would they do?”
Mar 24, 2025 | AI, Governance, Leadership
It appears to me that there is a wave of intellectual agoraphobia driven by the sudden emergence of AI platforms and tools gripping many of those I interact with commercially.
My recently departed mother, in the last year or two of her life found it hard to leave the immediate environs of her home. She increasingly felt intimidated by change, and the tension of just interacting with the unfamiliar.
To me it looked like mild agoraphobia, but my siblings thought it was just a retreat from change because she felt unable to deal with it easily.
Agoraphobia is not just a fear of wide-open spaces or going outside the house. At its core, agoraphobia is about the fear of being trapped in situations where escape might be challenging, help unavailable, with no place to hide beyond the familiar. It’s a state of mental paralysis, driven by the anxiety of the unknown.
How does this psychological insight impact on an enterprise?
Plenty of businesses suffer from what could be called ‘commercial agoraphobia’. A stubborn unwillingness to venture into new territories, innovate, and embrace change. At board level it is passed off as a Conservative Risk profile’ in shareholders best interests.
In fact, directors and management are reluctant to leave the familiar comforts of old processes and established wisdom.
Even worse, some institutions and enterprises deliberately build barriers to prevent any sort of change filtering in, usually in the name of probity, governance, and consistency. To my mind that preference becomes intellectual agoraphobia.
This condition traps otherwise intelligent and capable leaders into rigid, immovable thinking, dismissing the forces exerting pressure on the business as passing. Even as change surrounds them, these people stick to the comfortable routines of the past.
This brand of agoraphobia thrives in echo chambers, fed by confirmation bias and groupthink. It is the subtle saboteur of growth, quietly whispering that risk is too high, change too uncertain, and innovation too risky.
However, staying inside this comfort zone guarantees eventual irrelevance.
The leadership of Nokia pre smartphone suffered from this affliction. Similarly, Kodak leadership failed, initially seeing the potential of digital photography, then killing it. Xerox missed the slew of innovations coming from their PARC labs. There is a long list of intellectual agoraphobics in our commercial history. IBM, Blockbuster (who had a leader but fired him as they did not like the message) Olivetti, Borders, and many others, a few of whom saw the light in time, such as Bill Gates’s late recognition that the internet would change everything and successfully pivot.
Intellectual agoraphobia leading to strategic stagnation.
The only antidote? Real leadership.
Leadership is not just about authority or charisma. It’s about the courage to challenge assumptions, dismantle outdated practices, and push beyond intellectual comfort zones. Leaders must confront intellectual agoraphobia head-on, fostering a culture where questions are encouraged, risks intelligently managed, and curiosity and adaptability prized above complacency.
It is like learning to swim as a kid. You must overcome that uncertainty and fear of the unknown to achieve an uncertain outcome.
Small businesses are as likely as large ones to suffer, more so as they often lack the depth of resources that gives large businesses a buffer. The benefit they have is agility, a great advantage in a homogenising world changing as rapidly as the one we currently inhabit.
Artificial intelligence is driving a tsunami of change across our commercial landscape.
Hiding from those changes by ignoring them, or dismissing them as a passing fad, will not be an option for long.
The only antidote is to get out there and play, learn, adopt, get some mud in your eye, and recognise that intellectual agoraphobia leads to commercial irrelevance.
Are you succumbing to Intellectual Agoraphobia?
Mar 17, 2025 | Governance, Leadership
‘You understand why I did it? ……The man that passes the sentence should swing the sword.’
Those are the words of Edard Stark in Season 1, Episode 1 of Game of thrones as he explains to his son why he was the executioner of a deserter from ‘The Wall’
There is a lesson for all leaders in this passage.
As James Clear put it: ‘The one making the choice should also be subject to its consequences’.
The scale of modern economies and enterprises and the nature of the communities into which we have evolved since the industrial revolution have made this core tenet of management and leadership an extremely hard benchmark to reach. We have put the decision makers way above the normal flow of consequences from their choices.
Directors are there to represent the best interest of the shareholders they represent.
Politicians are there to represent the best interests of the majority of those they represent.
How often do you see the choices made by these groups, and many others up and down the scale of the social and economic edifices we have built in the name of the greater good reach that high moral standard.
Rarely it seems.
Perpetrators of ‘White collar crime’ that occupy seats of real influence are rarely prosecuted. Partly this is because it is often very hard to ‘prove’ in a legal sense, and I suspect also partly because it is a ‘victimless’ crime. However, such victimless crimes all have consequences, diffused amongst faceless stakeholders somewhere out there.
Occasionally, the consequences do come home to roost.
Elon Musk has made many choices in his life. Those choices made him a multibillionaire, an innovator who could do the impossible. Make digital payments of online purchases safe? Change the face of the auto industry? Land a space vehicle on a platform ready to be reused? These were all impossible, until he did them. By force of sheer will, determination, imagination, and an ability to attract incredibly smart people into his dreams, he did the impossible. Then he made a choice, to swing to a seemingly destructive position supporting a set of values completely at odds with those who had supported him and his businesses.
The consequences of that choice are becoming clear very quickly as the sales of Tesla cars around the world tank, contracts for the services of Starlink, a fantastic product are being cancelled, and the multibillionaire of today is rapidly becoming the sad millionaire of tomorrow. It will only take one bank to call in a loan made on the basis of the stratospheric value of Tesla shares a few months ago to blow the house of cards away, revealing the hollow commercial centre to be on display.
The one making the choice should also be subject to the consequences.
Elons choice to harness himself to a narcissistic sociopath that looked like the investment choice of the century in November last year, now looks like the absolute opposite. Musk will feel the consequences where it really hurts: his ego, self-belief, and $billions, as well as his ability to attract those who provide the means to make him so successful into his orbit.
Sadly, the impact of Musk’s choices will also be felt by many who have followed him, many without much more than a wish to ensure they were on the gravy-train.
The wider community will be worse off by the fall from grace of a remarkable innovator. However, I would not count out a revival, assuming my gloomy picture of the immediate future is correct. Musk, amongst his many traits is incredibly resilient.
Mar 10, 2025 | AI, Leadership
Ever wonder why smart groups often make poor decisions?
Businesses and institutions often slip into ‘Groupthink? From casual groups to formal teams, even when aware of their tendency toward confirmation bias, they naturally favour opinions aligning with prevailing views.
At its worst, Groupthink means ignoring opportunities to consider differing opinions and data and dismissing them when they are presented. This usually leads to choices that with the benefit of hindsight are clearly stupid. Think of it as everyone boarding the wrong train because no one dared to question the destination.
Alignment, that often used management cliche however, is essential for optimal performance. Everyone on the team should clearly understand the direction they’re heading and why that direction matters. To extend the metaphor, everyone on the train knows where it is going, what their role is, what they need to do on the journey to arrive at the declared destination.
True alignment happens when all opinions, information, and data have been carefully considered, weighed, and distilled into a clear consensus. The best choice is obvious, and everyone either fully supports it or at least understands it as the optimal route forward. The strategic challenge is ensuring the destination to which all are aligned, is the optimal choice given the strategic, competitive, and regulatory context.
Are ‘Groupthink’ and ‘Alignment’ synonyms? Or just two sides of the same coin?
Groupthink: Bad. Alignment: Good.
Both can suffer from confirmation bias, even when teams consciously try to avoid it. Alignment can become especially dangerous if unchecked confirmation bias sneaks in.
Many strategies exist to ensure the best choices emerge from challenging decisions. Employing a Devil’s Advocate is one approach to removing any pre-existing bias. It includes techniques like ‘red teaming’, or involving independent external experts for objective interrogation.
Chat GPT 4.5 recently landed in my account with its ‘Deep Research’ capability.
This marks a genuine leap forward for AI.
Earlier models like Chat 3.5 already enabled the asking reflective questions like, “What have I missed?” or “What should I be asking?” Although useful, these prompts typically delivered limited responses.
Chat 4.5 with Deep Research elevates the Devil’s Advocate approach to an entirely new level. It deeply interrogates the topic, reasoning through provided prompts and resources to deliver nuanced, sophisticated, and profoundly useful insights.
This capability changes the game for management teams, provided their commitment to a particular viewpoint doesn’t block genuine consideration of alternatives.
l remember Bill Shorten’s absurd 2012 ‘blind support’ gaffe when asked for a response to PM Julia Gillard’s removal of Peter Slipper as Speaker. He said, “I haven’t seen what she said, but I support whatever it is that she said.” While Shorten understandably wanted to avoid contradicting the PM, his words perfectly illustrate how blindly following a position without any questioning is just dumb. He was however, perfectly aligned with the PM, useful when climbing slippery leadership poles.
Mar 5, 2025 | AI, Leadership
AI is the latest corporate cure-all. Just sprinkle some over your business, and inefficiencies vanish. At least, that’s the pitch.
Everyone from academics and government bureaucrats to consultants, seasoned practitioners, casual observers, and the local conspiracy theorist has an opinion on its transformative power. Digital transformation discussions obsess over AI, treating it as a magic elixir capable of solving all operational woes.
The advice is often generic, but sound: define objectives, assemble teams, allocate resources, identify use cases, research the best tools, establish a process to scale successful experiments, and so on. Logical steps, but there’s a crucial caveat beyond the difficulty of execution: the false assumption that ‘business as usual’ can be improved with a few AI tools.
The gravitational pull of the status quo is underestimated. Many assume that AI’s elegance and utility will naturally override entrenched habits and outdated processes.
It won’t.
Change doesn’t happen because of technology; it happens because there’s an undeniable, compelling reason to shift. That reason must be powerful enough to overcome the inevitable resistance. The benefits of change are often broad and enterprise-wide, but the costs, both real and perceived, tend to be personal, creating the very resistance that stalls progress.
No matter the size or urgency of the change, the Theory of Constraints applies.
The speed of any process, including transformation, is determined by its biggest bottleneck. Identify the constraint, remove it, and then tackle the next biggest friction point. When the constraint is culture, the weight of the status quo, and the psychological safety of individuals, change demands a different approach. To be successful, it must be driven by empathy, engagement, and a keen understanding of what’s really at stake for the individuals at the ‘coalface’ of the change.
The compounding effect of small but continuous improvements is what drives real progress. Rinse and repeat, again, and again.
Used tactically, AI is enormously valuable now and will only accelerate in importance.
I have a three-part mantra for tackling bottlenecks: Automate, Delegate, Eliminate.
AI excels at all three. It automates processes, enables and manages delegation (sometimes through outsourcing), and eliminates inefficiencies by delivering transparency and reducing waste.
However, AI alone is not enough. Re-engineering a process is not about throwing technology at a problem. It requires leadership, a deep understanding of why bottlenecks exist in the first place, and the willingness to take decisive, sometimes radical, action.
The brutal truth: AI doesn’t make bad decisions good, lazy leadership effective, or broken cultures functional. It just automates the mess faster. If organizations don’t adapt, if people, workflows, and mindsets don’t shift, then AI will be nothing more than an expensive distraction.
To truly reap its benefits, businesses must not just implement AI but also create an environment where it can thrive. And that demands real leadership. AI does not lead, it can only go where directed, led to the situations where its ability can be leveraged. If leadership is missing, all AI does is magnify and accelerate the impact of the problems, creating uncertainty on the way.
