Jan 21, 2022 | Change, Leadership, Strategy
Momentum as we all learnt in high School physics is Mass X Velocity.
Decisions made have no mass, but they do seem to have the characteristic of building momentum.
Those businesses in my experience that have an overt bias for action make more decisions, get more done, succeed more often than those less willing to decide and act. They also make more mistakes, as they make choices with less than complete data, but are also willing to recognise mistakes earlier and back out, avoiding the ‘sunk cost’ syndrome.
Opportunity cost is hard, if not impossible to quantify, but it is clear to me that those who have the bias to action, make decisions and act on them, will suffer from opportunity cost less than those that wait for perfect, or just more information, by which time the opportunity had gone.
Dad joke:
Knock knock…..… Who’s there? ..….. Opportunity…………Opportunity who? ………….Silence………..
Opportunity does not knock twice!
There is a balance however.
Moving quickly in itself should not be the objective. The challenge is to quickly understand the balance of risk and reward that enables a decision and subsequent action that is important. It makes sense to spend more time considering a ‘bet the farm’ decision than one that is less likely to be catastrophic should it go pear-shaped. Some decisions can be reversed quickly in the event of new data emerging. The mistake is taken as a learning opportunity and embedded in the ‘wisdom’ of the enterprise, to ensure the same mistake is not repeated.
Amazon Prime has been the mother of all marketing tools, delivering Amazon a competitive advantage that has overwhelmed all comers. However, Prime was not born in its current form. It went through a number of iterations over an extended period as Amazon experimented, learnt and doubled down on what worked, while removing the pieces that did not.
Prime started as a ‘2 day shipping’ promotion in a narrow geography, under a promotional name. It evolved to 2 day shipping in the US as the standard, to expedited shipping for a fee, to free shipping with a Prime subscription membership. Over a decade, Amazon has progressively squeezed the time between order receipt and customer delivery at an astonishing rate, that competitors have failed to match. This progressive compression of their decision making and implementation cycle is a key to their competitive advantage.
This bias for action, transparent accountability and learning does build momentum, and once going, is very hard to stop, and almost impossible to compete with successfully.
Nobody ever claimed the prize from Colonel ’40 second’ John Boyd. He was never beaten in a dogfight simulation because he grabbed the initiative and held it, operating inside what he called the oppositions decision making cycle time.
This is decision making momentum, which he codified as the OODA loop.
To me it is one of the decisive competitive tools of the information age.
Dec 31, 2021 | Leadership, Personal Rant
I had not intended to publish another post until 2021 was behind us after the review a few days ago.
However, the decision of national cabinet yesterday, coupled with today’s Covid numbers changed my mind.
In the back of my memory is an early Monty Python sketch.
Two characters discussing the very disturbing rise in murders, and what should be done. One finally suggests that murder be made legal, end of the problem with murder rates and associated public outrage.
Yesterday our politicians ‘led’ by #scottyfrommarketing decided to change the definitions of what constitutes a ‘Close contact’. While the definitions and consequences have varied across states to date, they are now consistent, and will reduce the number of tests, and therefore the number of cases of Covid reported.
Problem solved?
Not as such.
Perhaps the political problem has been massaged, but Covid has not gone away. The collective memory of Australians will be that once again, politicians have, if not lied, then creatively massaged numbers to make black look a bit more like white.
It is Ok to acknowledge that this pandemic has become endemic, and despite all the science at our disposal, we are stumped, for the moment. That admission however tacitly concedes that people will become sick, and some, particularly the old and in some way vulnerable, will die. Not a good election promise.
The header graph is NSW covid cases to December 29th. The 30th, yesterday was 21,151 and today, the 31st will be added tomorrow, January 1, 2022. Probably not a good beginning to the year.
Yesterday’s 21,151 came from 148,410 swabs, a 14.3% infection rate. This is a number that very recently would have induced political panic, now it is just a number to be massaged.
I wonder what the gagged scientists think of the massaging?
Have a good, and distanced, new years eve celebration.
Dec 24, 2021 | Change, Governance, Leadership
The PM has made an absolute mess of it, bouncing from one headline to another like a clown on speed. You must give credit for the energy, pity it is expended on trivialities rather than tackling the big questions.
The government has changed tack in the face of the coming election, they cannot any longer claim to be the better fiscal managers of the economy, better husbanding our tax money in the face of the huge deficit, largess to corporations under job keeper who did not need or qualify for it, and the massive pork barrels rolled out over the past few years. $1.9 billion to government seats, while labour held seats received $530 million. The most recent report being a review of 19,000 grants in a ratio grossly favouring government seats published by the SMH. The one I live in, the marginal seat of Reid in Sydney, has received $14.8 million, so the member will be crowing about how effective she has been. To be fair, she does seem to have been a smart and engaged local member with an impressive academic and community engagement resume, as well as a solid foundation of common sense. The neighbouring seat of Grayndler, held by the opposition leader, in at least as needy a place as Reid, received $718,000. Will it be enough to save Reid for the Liberal party? Who knows, but amongst my peers it is the solid view that a vote for an effective and moderate local member is also a vote for an ineffective, narrow minded, spin driven and vindictive Prime Minister. If this is the state of governance in an area with publicly available information, heaven knows the mess that those areas, increasingly protected from public view, is in.
In March the Royal Commission into Aged care dropped onto the table, detailing a chronically under-governed industry making the privatised providers a fortune at the expense of the most vulnerable amongst us. It is a wrangle between the feds who regulate aged care, and the States who fund it, nobody carries responsibility. On top of the deaths that occurred in Victoria from Covid mismanagement, it is surprising that this has been wiped off public awareness. It is an ongoing disgrace. Perhaps it is the result of the monumental cock-up the feds made of the vaccine rollout in the early part of the year, and the wrangling the went on amongst the states that has wiped the Commission’s findings from public condemnation.
There was a gabfest in Glasgow, which seemed to be useful, apart from the lack of contribution made by Australia. Sadly, the PM made his ground-breaking presentation outlining ‘The Australian way’ to a packed house of a cleaner, sound recordist and journalist who copped the ‘dog watch’ and was probably asleep. Even the hecklers were too disinterested to show. I continue to find the contrast between the reliance on the science in relation to Corona, and the total dismissal of the science in relation to the reality of climate change, a complete mystery.
Then, just as we thought the worst was over, along comes Omicron, and once again, we are caught with our heads up our arses. My old dad used to say everyone made mistakes, but only a retard made the same one twice. The federal leadership must all be retards by that measure.
At the state level, there has been wholesale leadership change in NSW, and it has become very clear that premiers vowing to keep their states sovereign is a winning strategy. I conclude that the winning is only because of the total leadership vacuum coming from Canberra.
The Covid battle, seemingly being won towards the end of the year, has suddenly in December been put back on the agenda, this week blowing up with record cases being identified. The emergence of this new, hyper-spreadable omicron version may yet force punitive action to again stamp on human beings doing what they need to do for their own psychological well-being, congregate and communicate in person. As I write this on Christmas Eve, new Covid cases are comfortably over 5,000 a day, a level that a month ago would have induced panic amongst NSW politicians, but now seems rather ho-hum.
Rorts have become so common, they are almost ignored by the media and voters, apart probably from that modest percentage of voters who are deeply engaged and angered in the process. There have been plenty to pick from. Almost $300 million given to Australia’s largest companies who actually increased earnings during the lockdown seems just so wrong. Another 6.2 billion was forked out to businesses with more than 10 million in turnover that did not meet the 30% fall in turnover threshold in the first 6 months of the scheme. Meanwhile, small businesses are closing, and those in the arts, a foundation of our cultural life are left to their own devices. Despite the faults and rorts, the money pumped into the economy has been essential, and cushioned the Covid induced fall in activity that happened.
The ‘Merde massive’ perpetrated by the government unilaterally tearing up the submarine contract then lying about the circumstances leading up to, it leaves Australia looking like an unreliable partner. Not much antidote to our trade problems there, coming as they do on top of the idiotic rattling of our tiny sabre towards our biggest trading partner China. Let’s hope they are sufficiently gentlemanly to hold off until we have our new subs, about the time my granddaughter will be retiring.
What about the leadership wrangling in the junior government partner, the National party, giving us Barnaby back as deputy PM. Clearly, Barnaby and the usual PM can barely stand to be in the same room, not a recipe for good governance. Nobody seems to like the Nats, outside of the few seats they manage to hold, which I suspect will be subject to aggressive independent focus in the lead up to the next election. Speaking of which, many of the sensible moderates in the liberal party will be up against it, as they struggle to publicly support climate policies they must privately consider no better than wishful thinking by a few recalcitrant nig-nogs.
Amongst all this, the Liberal Government discovered belatedly that the culture in and around parliament house stank. In fact, it stinks so much that in any other workplace, executives would be fitted for striped suits and shipped off for an extended holiday at public expense. This has been very inconvenient in the early stages of an election runway for some time early in 2022. However, the PM is making the supreme effort to put it all behind him as he massages messages, and the truth. I wonder if the report, promised to be public, commissioned by the PM from his departmental secretary investigating the accusation of rape in the defence ministers office will ever see the light of day? I guess not.
More broadly, despite the covid induced trading environment, property prices in Sydney and Melbourne have gone mad. Lots of people taking advantage of the historically low interest rates, ignoring the consideration of what happens when interest rates go up. The reserve bank governor after reassuring us they will stay low for several more years has recently softened his language. This leads to a conclusion that we will see them creep upby the middle of next year, which could lead to a middle-class bloodbath. Please note, I am absolutely unqualified to make this prediction, but common sense does dictate an increase soon.
Meanwhile, Small Business struggles to generate revenue, pay wages, and keep the place going. A quick look around most shopping areas at the closed retail outlets, and industrial parks at the locked factory units will tell you how well that is going.
The war (or was it another ‘police action’?) in Afghanistan is over. Pity about those Afghans left there, particularly the reviled Hazaras who are paying a high price for our so called ‘principles’. Australia played its part in the deception of those in the region, and ourselves, right from the beginning of the mess when President Bush decided to punish Al Qaeda after 9/11 2001, and invaded Iraq. The excuse was the non-existent WMD, which had nothing to do with 9/11. We ended up 20 years later with an ignominious withdrawal from Afghanistan after massive expenditure of gold and more importantly, lives.
The Americans managed to get rid of their President in the November 2020 elections, with Biden taking over in January, but not before the US Capitol was subjected to scenes reminiscent of a coup in some South American backwater. The dangerous sniping from the sidelines by Trump continues unabated, but it appears to me that fewer beyond the rotten heart of the republican party are taking notice every day.
Division throughout the developed world has seen the rich get richer and the gap widening to all the rest over the last 12 months. Social media has played a role in this, and the backlash will lead to regulation of some type. In the US, Congress is starting to consider how they go about this. Problem is, very few of them have the foggiest idea, so the potential for stupidity is substantial. Europe has had a try, but the GDPR (General Data protection Regulation) regulations have not slowed down the rates of ‘anti-social’ material by much, largely because the main platforms are US owned. Australia’s pathetic attempt to fund journalism becoming law in February by forcing social platforms to pay for news content, has just helped News Corp to fatten its bottom line. Facebook demonstrated its contemptuous corporate power by shutting down in Australia for a day, reminding everyone that they were the biggest bully in the playground. This dog is best repealed, quickly, and replaced by some sensible measures drawn up with the public interest in mind.
Supply chains around the world have been ripped apart. If you can get a container delivered to Sydney or Melbourne it will cost you 4 to 5 times what it cost a year ago. Imported finished products and raw materials are in short supply, and prices have skyrocketed. There is a real possibility our trucks will stop progressively in the absence of AdBlue, an additive made from urea, an ingredient in fertiliser. Australia’s only producer Incitec Pivot is closing its Brisbane factory because they cannot get a reliable gas supply, ironic given Australia is the biggest supplier of LNG into the world market. China makes 83% of the world’s supply of urea, and needs it in the domestic industry, so no more exports, and the rest of us can get stuffed. This is an example of economic power being wielded by what is on some measures already the biggest in the world, and on target to be the biggest on all measures within a year or two. This assumes that the fragile Chinese financial system does not crash, that an economy controlled by a central power can defy the laws of economics as we currently understand them. Russia failed 40 years ago in a similar experiment, but I suspect the Chinese are smarter, and have learnt the lessons of history.
I have missed a lot; it has been a busy and eventful year despite the successive lockdowns. Let me know what the two or three things you felt were most important to you.
I have tried to think of good things that happened, thought I would leave them to the end. Well, here I am, at the end, and I cannot think of any. Must be some, help me here.
In any event, have a safe and merry Christmas, and come back in 2022 looking for some improvement personally, professionally, and in our communities.
Thanks for reading, commenting, and sharing this year, or even if this is the first dose, make it the first of many.
Merry Christmas, and have a great 2022, a low bar to be better than 2021
Allen.
Dec 15, 2021 | Leadership, Management
What happens if you are on the receiving end of negative feedback during a debate, or an ‘executive heckle’ during a presentation?
How do you respond?
Our natural reaction is to push back, to defend your position, which creates friction and ‘heat’.
That is what happens when you respond to a negative proposition with ‘Yes but’. You are setting yourself apart from the questioner, defending an alternative position.
By contrast, had you responded to the heckler with ‘Yes and’: what you have just done is agree with the heckler, at least partially, and then been able to move onto the reasons why it is an ‘and’
This subtle but fundamentally important distinction was brought home to me years ago. I was in a running debate with the MD of a conglomerate to whom I reported as GM of a division at EBIT. I had taken over as the GM after 5 years as Marketing manager, running the logistics, and part of the sales in my spare time. It had been turned around from a disaster into a commercially aggressive, successful and profitable entity.
The MD’s latest ‘brain-fart’ at the time was to incorporate the division into the much larger core division of the company. The much larger division was monolithic, and relatively unprofitable, lacking the innovation, commercial skills, and ‘can do’ culture of our much less bureaucratic smaller division. The MD’s view was that an amalgamation would bring to the larger division the commercial hard edge of its smaller cousin, thus making the larger entity more responsive.
My view expressed strongly was that to amalgamate the smaller division into a larger division would kill the very culture that had been built which made the smaller division successful. There were better ways to address the problems of the larger division than risking smothering the culture of the smaller one.
It was a debate I lost, and resulted in me leaving a short time later, rather unceremoniously.
With the great benefit of hindsight, and from experience gained in the almost 30 years since, what I should have done instead of saying ‘yes but’, and having the argument, which I was certain to lose, was to say ‘yes and’ agreeing that the problems of the larger division were real and needed fixing. I could have then suggested creative and practical solutions to the problems. Instead, I unknowingly chose to lose the argument.
It still may not have worked, but the odds would have moved dramatically into my favour. However, at about 40 years old, and having been given the responsibility of running the business, almost my perfect job, I was too self-unaware and perhaps arrogant to acknowledge the inevitable failure of the path I unwittingly chose to argue the case.
Simple and subtle changes of words can have a profound impact on the response they bring.
Dec 6, 2021 | Change, Innovation, Leadership
The old way of thinking and working in silos, based on organisation charts, is gone.
The key commercial question now is how to develop and commercialise innovative solutions to problems faced by individuals, and the wider community, faster and more efficiently than others.
We all know that we work better in small groups, differently but better, more productively. The problem is we have had imposed on us the structures originally conceived to enable scaling from cottage industries to mass manufacturing, where the benefits of scale outweighed the transaction costs incurred.
We have now reached a point where the worm has turned.
The transaction costs are greater than the scaling benefits, because of the transparency enabled by digital.
The nasty covid pandemic has accelerated the process of digitisation to the extent that we have consumed a decade or more of change in a year or so. Some have not made the change, and long for the return of the ‘normal’ way before covid. However, the truth is that we must go forward, we need to accommodate the new world as it is now by the way we collaborate.
For the last 30 years we have struggled with the growing inefficiency and resulting lack of engagement of employees down the organisation chart, driven by the remoteness from decision making.
We tried to fix it with various forms of matrix organisation, but we approached it from the old mindset of accountability and responsibility. ‘How can I be responsible for something over which I have no control????’ This question has loomed large on many occasions.
Matrix organisations with a silo management mentality do not work.
We need to embrace not just the ‘radical transparency‘ espoused by the likes of Ray Dalio, and Atlassian where it is a core value, but ‘radical adaptability’ to prosper.
Giving control and accountability for outcomes over individual workplaces to the people in them is the new way. Finding ways to speed up the process of change, to be able to adapt and innovate has become the path to commercial survival. We have been talking about it for ages, but trying to build it from a siloed mentality starting point will go nowhere.
The ‘radical transparency’ of Dalio will not suit everyone. You need to be a resilient personality to take and grow from the negative feedback. Recognising this, Dalio only hires what he calls ‘arseholes’, those who are resilient enough to take the feedback and learn from it.
A business with a culture of being ‘nice’, polite, keeping ideas and views to yourself, and not articulating those views and ideas to others, leads to the politics we see in most organisations. Things that are thought, and said privately, that will not be said publicly are corrosive of trust and collaboration.
Radical transparency needs an entirely different mindset.
That different mindset can lead to ‘radical adaptability’, as any idea is a good one until it is taken down by a better one, or by finding some flaw in the argument. By another name, in other circumstances, this is ‘Evolution’ or ‘Survival of the fittest’, and John Boyd’s OODA Loop at work.
Accountability & candour lead to collaboration, and collaboration is the key to growth in this new, digitised world, as it compounds effort and outcomes.
Header cartoon credit: WWW.Gapingvoid.com Highlights the challenges of enabling transparency. It is usually great for others, and in principle, but not for me!
Dec 3, 2021 | Leadership, Management
How often have you heard the question ‘tell me about your weaknesses‘ in an interview of some sort?
As a corporate bloke climbing the greasy pole I heard it a lot, and it has popped up from time to time in the last 25 years I have been consulting.
It always struck me as the question disinterested people would ask, when they ran out of sensible questions.
However, all is not lost.
A recruiter I know looking to fill an interim role called me, and we got caffeinated, during which he expanded his view that I was partly wrong.
A part of his process is to define the four crucial ‘Must haves’ for a role he is filling. Towards the end of an interview, he asks the candidate to rate themselves on the 4, best to worst.
It is a more sophisticated way of asking the dumb question, and engages the candidate in a conversation about their self-confessed strengths and weakness in the context of what is important to the role, after the interviewer has had the opportunity to make their own assessment. Any significant divergences can be further investigated.
If I was interviewing for a B2B sales manager, I might have the following 4 ‘must haves’ :
Coaching – How do you work with front line sales people to help them improve their performance?
Attention to detail – Are you a detail person, or a ‘big picture’ person?
Creativity – Are you someone who finds creative solutions to problems, or are you best communicating and working with an established process.
Growth – How good are you at finding new avenues to grow, by better leveraging the resources you have?
Recruiting for a senior financial manager, or CMO, would require a different four questions, but you get the picture.
I was not the right person for the job my recruiter friend had open, we both knew that, but I came away from the conversation with a great insight into a common question, one that I have sometimes had difficulty answering politely (I once responded with ‘you will have to hire me to find out’. Did not get that gig).
