Jul 8, 2020 | Governance, Leadership, Strategy
I am not in the habit of quoting V. I. Lenin, but he did get some big things right.
‘There are decades where nothing happens, and there are weeks where decades happen’
We are in one of those ‘weeks,’ the inflection point of a lifetime for most of us.
Almost every trend we look at, and forecast by, is somewhat linear. There will be bumps and jumps, but overall, looked at over time, they are linear.
Most business models are built on the automatic assumption of those linear trends holding true. Our institutions utterly depend on that being the truth. As a result, when the inflection point comes, it is traumatic; the response slow and often inappropriate, assuming all will return to a ‘new normal’, that it is just another bump in the road. Perhaps a nasty one, but a bump nevertheless.
I suspect that is not the case currently, this is not a bump in the road; this is a U-turn down a bush track into the unknown.
Forces build for a while in the background, looking linear, and then some sort of catalyst creates a confluence that totally changes the forces that drive the industry. The resulting chaos creates opportunity as much as it creates uncertainty, disharmony and dislocation of the pre-existing status quo.
Today, we are watching as several trends come together, which will create a new normal, looking little like the old one.
The digitisation of everything, has taken a dose of steroids since January, changing the way we shop, communicate, and work. To me it looks a bit like I imagine the confluence of the internal combustion engine and electricity looked in 1920. They had been around for a while, but suddenly converged to become transformative powerhouses that led to a 50 year burst of productivity increases.
Similarly with education. We have been wandering down a road of increasing commercialisation of education, marketing a tertiary qualification to Australians as the road to a good life and to international students as the ticket to wealth and a visa, while gutting the development of trade skills. Suddenly we have closed borders, the major source of international university students actively discouraging coming to Australia, and a massive shortage of depth of trade skills we cannot fill with 457 visas.
The education sector is in deep financial and philosophical trouble.
What about energy? For years we have clung to coal as not only our primary energy source, but as a huge magnet for international investment and export commodity sales, to the active exclusion of alternatives. Now we have wind and solar producing energy more cheaply than coal, and technology rapidly solving the storage problem. At the same time, the distribution of power is changing rapidly from a centralised system to a localised one. That confluence must be producing a bad case of reflux in Canberra. Political donations, existing political institutions, and relationships will not be enough to stem the tide, and the outcome is likely to be bloody, inevitable, and very soon.
Coming at us are revolutions in biology, driven by gene therapy and CRISPR. The human genome was first mapped in 2003, at the cost of billions. Now you can send a sample along and get your own map for a couple of hundred dollars. CRISPR, discovered in 2012, has accelerated our gene editing capability faster than Henry Ford’s production line accelerated the manufacture of cars, and look what happened then. Massive investment in roads, the 2 day weekend, and people travelled daily further than they had in a lifetime just a generation before.
That is before we consider the coming tsunami of AI, Quantum computing, additive manufacturing, and the new materials being developed with properties that seem to be out of the mind of Jules Verne.
As the old Chinese proverb goes: ‘May you live in interesting times’. We are, and to some measure that will be due to the changes driven by the Chinese journey out of poverty into world dominance in just over 30 years. This is trend reaching a tipping point without a lot of notice, or thought about the consequences.
Are you ready?
Jun 29, 2020 | Collaboration, Governance, Leadership
I was recently asked to turn my mind and experience to the question of mentoring, and to reflect on the benefits and pitfalls that may be present.
Over the years, I have had the benefit of a couple of mentors who profoundly influenced my view of the world, and in turn, have set out to pass on these lessons to others.
At the core of a mentoring relationship is the opportunity to engage in ways not easily replicated in the normal run of activities in an enterprise. Attributed to Benjamin Franklin is the sentence: ‘Tell me and I will forget, show me and I will remember, engage me and I will learn’. Over 45 years of commercial life, this simple observation has proven to be absolutely true.
The means of engagement comes from Greek philosopher Socrates, and as a result is commonly called the ‘Socratic Method’. It relies on leading someone to a conclusion by asking questions. By driving towards a conclusion that the mentee reaches by themselves, being directed by questions, the impact will be greater, as they will be fully engaged.
Objective of a mentor/mentee relationship.
To pass on experience, both professional and life, that enables the mentee to develop their capabilities and skills faster than would otherwise have been possible.
The role of a mentor is:
- Develop the mentee professionally and personally. To achieve this requires mutual trust and respect, which has to be earned, as it will not be just given, in either direction.
- A precursor of trust is that there is a clear understanding that mutual confidentiality will be maintained.
- Listen to the words, and understand the meaning of the words of the mentee, as a means to ensure there is clear understanding of the questions, problems, and personal nuances present.
- Help the mentee to solve their own problems themselves, do not do it for them, but assist in the process by questioning.
- Not to expect, or want the mentee to be a clone of yourself. Everyone is different, and those differences of experience and perspective should be encouraged and leveraged.
- Advocate for the mentee, offering exposure and guidance to others in the enterprise, and to the challenges that emerge in every organisation and personal career.
- Deliver appropriate resources to the mentee when they will be most useful
- Act as a role model
The process of mentoring
- Establish ground rules, goals, and mutual expectations early on.
- Do a ‘needs’ assessment and gap analysis, that recognises the strengths and weaknesses of the mentee, as well as their opportunities for growth. The gap analysis should be influenced by the next logical step, mentee aspirations, and observed/agreed weaknesses that require being addressed.
- Agree mutual goals for the process, together. What are the expectations and goals of both parties?
- Agree a formal contact schedule, supplemented by the ‘rules’ that may apply around informal contact.
- Listen and question, rather than advising, and only advise after listening. This should be an iterative process, and advice should be the last item, well after questions that are often ‘What if’, ‘Why not’, or ‘How’, have been exhausted
- Let them make their own decisions and understand the consequences of accountability, and the buzz that comes from it.
- Be mutually accountable
- Recognise, address and be transparent about your own biases.
- Build trust, an authentic connection.
- Recognise a round peg that may be in a square hole, and provide feedback and assistance to either reshape or move elsewhere, to everyone’s benefit.
- Finally, and perhaps most importantly. Ensure there is a sense of psychological safety for the mentee, such that they are prepared to open up, knowing that there are no negative repercussions, just advice and acceptance. This will only happen over time, and assumes that the relationship has evolved positively.
- Not every mentor/mentee relationship will work, and there should be no hesitation for either party to acknowledge that, and move on.
Why invest the time in mentoring
- Every enterprise needs to build a functional and leadership ‘bench’. People move on, and around. A successful enterprise ensures that there are processes in place to renew management and leadership capability that are robust and continuously improving, so that they can accommodate those movements of individuals.
- It is a means to identify and develop those skills that will be of benefit to both the enterprise and the individual.
- Mentoring is a powerful way to build personal and functional networks. This enables problem solving and collaboration on a scale much wider than would happen in the absence of a mentoring process.
- Teaching, or mentoring, is the process of breaking down and addressing challenges and problems, considering options, and their possible outcomes. Engaging in such a process improves the capability of the mentor, as much as it does that of the mentee.
- It is simply making a contribution, not only to the mentee, but to the organisation and wider community.
What makes a good mentor?
- They need to be keen to do it, and enjoy the process
- They must engage with the mentee, and show they value learning, and teaching, and learning as they go from the act of teaching.
- They will encourage mentees to go out of their comfort zone, continually expanding it by way of active listening and Socratic questioning.
- They provide regular, formal and informal feedback, and articulate the paths to improvement.
- They are experts, and willing to share that expertise.
- They show the mentee the value of being mentored, what is in it for them.
- Leads by example.
- Recognises that the process is one of education, not training. Educating implies developing an open and critical analysis of situations, and formulation of tactics that reflect that situation. By contrast, training implies the application of a template that tells you what to do, which may not always be the optimum reaction. The ‘Why’ is always more important than the ‘What’ in a conversation.
What makes a good mentee?
- Watches and learns from the mentor
- Critically evaluate the lessons taken from the mentor and actively discuss the implications and application of the lessons.
- Willing and able to engage in the process
- Puts a high priority on the relationship with the mentor, without becoming dependent
- Actively engages in mutual critical thinking in the setting of goals, improvement initiatives, and improvement milestones.
- Is able to accept negative feedback when it comes, by seeing it as an opportunity to improve, rather than an attack on performance.
A final observation. In this day of #metoo and great sensitivity about the relationships of all types between genders in the workplace, we have to be absolutely transparent. The majority of mentoring relationships, at least in the near future, will be between a woman and an older man, someone who has the power by virtue of position and influence that can be leveraged for the benefit of the younger woman. In some instances this may create an obstacle absent in a mono gender relationship.
Jun 8, 2020 | Leadership
It has been a busy year so far for marketing departments, especially those without any real foundation and understanding of why people might engage with them, and their lousy products.
Each of the three has been taken as an opportunity for many marketers to show their humanity and support for those impacted by tweeting, posting, and even making expensive TV ads, to demonstrate their support and humanity.
By the way, buy my shit, because I ‘reached out’ to you!
We recognise those real acts of humanity and courage: volunteer firefighters risking their lives to save homes, (while some of them lost their own); medical teams and carers risking their lives to save our loved ones; business operators fighting to preserve their livelihoods while serving their community – those employers who’re quietly revising apprenticeship schemes to ensure the young, those most at risk from social injustice, get an even break.
My nephew is a highly skilled tradesman. He is willing to take on (what his mother calls), ‘rescue’ kids. He teaches them work ethic, trade and life skills that will enable them to survive and prosper as they move on from their apprenticeship. He’s making a real difference by putting his skills and energy into education and training; he is saving lives.
The so-called marketers ‘reaching out’ make no difference at all. They are talking to themselves from inside their bubble, making themselves feel good because they can. It is like taking a shower with a raincoat on: no value, and stupid.
Even worse than the deluded wankers who call themselves ‘marketers’ are the ones sitting in Boardrooms who condone this crap. They spend money that is not theirs on some consultant to develop a ‘Vision’ and ‘Values’ statement that no-one cares about, or believes. They give a nod to social responsibility while operating with transfer pricing with a Head Office in some tax haven so they can minimise taxes – the very means by which a society services their communities and by which they can address inequalities. They use the “Kerry Packer” defence: that governments are stupid, lazy, and waste the money so why pay them a penny more than is required by the laws that cannot be avoided? And yes, governments have their contingent of arrogant, self-interested people who mouth platitudes to get elected and gain the trappings of power and money, however, they are outnumbered by people who’re doing the best they can with what they have and taxes are their only tool to fund changes that will help others … like our volunteer services, our health professionals, our independent business communities – people like my nephew – who are keeping it real and doing genuine good.
Get out of your bubble, and do something useful, and for Christ’s sake stop reaching out to me with automated emails and flatulent advertising, to make sure I am OK!
Jun 5, 2020 | Governance, Leadership
Observing the virulent spread of ‘The Bug’ and the institutional responses from around the world, there is a disturbing commonality that points at a deficiency in political and ethical leadership, until the horses are running free, and the stable almost empty.
In this country, at least we have been consistent.
Consistent in denying there was anything to worry about until the crisis is upon us.
Since the 90’s there have been strident calls by scientists that we need to get off our collective arses and address the emerging human causes of climate change.
Ignored, until people die in fires, and then slowly, edged towards the backburner.
Similarly, the clusterf**k that has been the management of the Murray Darling basin, although people may not have died, water has been ‘allocated’ under dubious circumstances, natural flows disrupted, investment distorted, and money made on the ‘QT’.
Now we have the Bug, and people are dying as it spreads, and particularly in the US, the systems are now seen as having been gutted, and are grossly inadequate to manage the crisis. That crisis is now escalating beyond anything foreseen to racial violence, unleashing forces from what now appears to be a cultural pressure cooker with devastating results.
In commercial life, the situation is the same. BP engineers knew that the Deepwater Horizon rig was a bomb waiting to go off, Boeing engineers knew there were problems with the 737Max’s software, executives in Australia’s banks and insurance companies were ripping off the estates of dead people, and enabling payments to the makers of child porn, and that ‘oldies’ were dying of neglect in aged care facilities.
There is a pattern to this political and corporate selective blindness that should deeply disturb us all.
The problem is known, when it is called to the attention of senior management it is seen as ‘inconvenient,’ so it is ignored and buried in favour of short term profit. Those doing the questioning are shut down, fired, or intimidated into silence. The problem persists in the dark corners until a crisis occurs, followed by hand wringing, press releases, provision of a sacrificial head for public consumption, and promises to do better.
The only antidote is what Ray Dalio calls radical transparency.
Shine lights in all the dark corners, create a culture where those lights are not selective or optional, but core ingredients of the culture.
Jun 3, 2020 | Change, Leadership
Have you seriously considered the implications of the apparent recognition that remote working can, and will, be a greater part of the employment mix in a post corona world?
There is a loud noise that ‘everything will change’ reverberating, an echo chamber of that view amplified by digital tools. It seems to me that human beings are simply insufficiently flexible to change ‘everything,’ although it seems the trend towards remote work has been accelerated a decade by the bug.
I have worked remotely and in offices, mixed about in a pretty random fashion for 25 years. The recent past has brought into focus some of the factors that I think are worth consideration.
‘Industrial’ management, the norm for the last 100 years, made in the image of Frederick Winslow Taylor assumes that in the absence of close supervision, little work of value will be done. At the extreme other end of the scale, you have enterprises like ‘Automattic’ the parent company of WordPress, that has remote workers around the world, and no head office of any type beyond the current location of Matt Mullenweg, the CEO and co-founder. It is a continuum on which we all fall somewhere, and it is evolving quickly.
The change in management style to remote will be for some, too much, as it adds several dimensions to the task that many managers are simply not up to doing.
Managing remotely adds a number of challenging dimensions:
Tools are needed that are not familiar or easily learnt by many, so simplicity is key. In addition there is a host of newer challenges to be addressed relating to the provision of the tools from software to the hardware, and the security questions hanging over everything digital.
Behavioural norms established in an office environment have been thrown out the window. Suddenly, we need to consider things like the interruptions of children, the family dog, and flexible working hours. In particular, the move to being available at all hours which was evolving as a result of the digital connectivity we had while still working from an office, has been supercharged. Suddenly, working 24/7 risks becoming the norm, unrestrained by reasonable office hours. All of these, and many others indicate that a very different way of measuring performance will be required.
‘Meetings’ from the casual gathering around the coffee machine in the morning, to the established and regular formal meetings deliver a rhythm to the day that is suddenly absent, and needs to be replaced somehow. The formal meetings can be done using one of the many tools, but the casual, unplanned meetings that happen in an office, that can be hugely valuable, present a different challenge.
Culture. The glue that holds the workplace together, will undergo radical surgery. Human beings evolved in small groups that looked after themselves by looking after each other. While this has eroded somewhat over the last 250 years, the need to be ‘together’ is nevertheless hardwired into our collective DNA. I suspect this will be the largest hurdle for management of the remote corporations to address.
Recognise the ‘God Syndrome’ and kill it. I cannot help but wonder if the challenge of leading remote teams is no more than a light being shone on existing failures of leadership that went largely unnoticed. Those in senior positions do not have all the answers, often they have very few of them. Unfortunately, those in leadership positions are often there partly as a result of being able to convince others they are right more than anyone else, and they play ‘the game’ more effectively. The reality is that they are usually as confused and uncertain as the rest of us, they just hide it better, and sometimes ask better questions. The tide has gone out, so the rocks are exposed, the failures of leadership are more obvious. Humility is the common characteristic of every really good leader I have seen.
Deliver Psychological Safety. Everything I see and read about the psychology of human beings is that we seek ‘psychological safety’. This is the place where we feel safe to do and say things that really reflect what we think, without fear of any sort of retribution. Achieving this in any workplace is really hard, and is the result only of truly great leadership. Achieving it when many of us are working remotely, away for the ‘safety’ of those few we know well and truly trust, will be a monumental task.
When you strip it all away, the reason workers are congregated in offices is to achieve the objective of making money for their employers. It is however an artifice forced on us by the industrial revolution, and is somewhat inconsistent with the way we humans evolved. The recent past has demonstrated that this congregation may not be necessary to achieve that commercial objective. Almost certainly it is not necessary in the form that it evolved, as a means to find a way to manage operational scale. Therefore, a rational management will set about reducing costs, and expensive CBD office space has suddenly become a soft target.
Cartoon header courtesy Scott Adams and Dilbert.
Jun 1, 2020 | Leadership, Strategy
As it seems we are slowly going to come awake after the close-down, it is timely to consider the steps we need to take to ensure that we survive the revival. Over 45 years of working with all sorts of businesses, in all sorts of situations, there are a number of common lessons that may be useful for you to consider.
Lesson 1. Cash availability.
You need cash to rebuild. During the downturn in activity, hopefully you have ruthlessly husbanded your cash, sold unnecessary assets, reduced inventory, reduced your cash conversion time, and cut out the ‘fat’ that accumulates when times are not so tough. Having cash on hand offers you the agility to be opportunistic.
The best way to preserve cash is to stop doing the things that lose it.
Generating cash by increasing debt can be attractive at a time of low interest rates, but debt driven cash also works against you if the plans you have do not work out as expected. Leverage works both ways.
Lesson 2. Have a plan.
This is generic advice, but you must have a plan. In the absence of a plan that is the framework for the allocation of limited resources, you will end up chasing your tail. In summary, you actually need several ‘nested’ plans that cover the key activities, each level driven by the others, but contributing to the achievement of the overall objective.
- Strategic plan: identifies the key overall objectives for the enterprise, defining broadly which markets, customers, technologies, geographies and channels that will be the priority.
- Revenue generation plan: identifies in more detail where and how the revenue will be generated, and the resources necessary to achieve the revenue.
- Financial plan: Projects the detail of the costs and returns generated by the activity. Usually these will be expressed as an annual budget, but given the uncertainty of the future, I strongly favour a rolling three month financial plan that acts as a go/no go trigger to other activity. This provides management information on an ongoing basis that enables the people in the organisation to learn, and make better decisions as a result.
- Operational plan. For manufacturing enterprises, planning your operations is essential, as they can be significant consumers of cash. Managing inventory and the optimisation of process flows through a factory will be an ongoing challenge. Operational planning is also essential in service enterprises, but is less obvious, as the key operating assets walk in and out of the building every day, or at least they used to, now they may just log on and off.
- People plan. An enterprise cannot function without people, they are the glue that holds everything together. Therefore deep consideration of the people and capabilities they bring, and that you can help them develop, is essential to success. For SME’s, finding and keeping good people is a significant challenge, and a huge cost burden when mistakes are made. As general Eisenhower observed: ‘Plans never work, but planning is essential’
Lesson 3. Ensure everyone is aware of the ‘Money in Vs Money out’ equation. Every individual in an enterprise has some level of control over this money in/out equation. Often it will be just the recognition of the cost of their labour compared to the value of the output they generate. The greater the awareness of the equation in an enterprise, the greater the chance that cost savings that do not impact on revenue will be identified and acted upon. While you cannot save your way to prosperity, every person in an enterprise should be focussed meaningfully on the equation, and optimising the expenditure of the key resources: money and time.
Lesson 4. Continuous improvement. Every profitable enterprise is a collection of processes that deliver, in some way, value to a customer. The profitability challenge is to do so at a rate less than the cost to the enterprise to supply it. Simple. However, collections of processes inevitably generate waste in many forms, which when removed, save time and money, while maintaining enterprise margins. Every tiny improvement that can be made, should be, as improvement become cumulative, and over time delivers huge benefits.
Lesson 5. The inmates must run the asylum. The traditional model is top down by decree, but this no longer works well enough to be sustainably competitive. Part of the planning should be aimed at building the ‘engagement’ of every stakeholder at every level. We know enough about human psychology these days to know that crucial to this engagement is giving control of every individuals workspace to them, and manage by outcomes rather than by activity. The corona bug has accelerated the trend to remote working, the ultimate expression of this upending of the typical management pyramid, by a decade. The huge management challenge is to articulate the limitations of every individuals decision-making power, and for most businesses to completely throw away their existing personnel assessment processes. KPI systems are almost always based on activity, and need to be replaced with KPI’s based on outcomes linked to the overall strategy. This will be very hard for some large organisations where those that make these decisions to change owe their current position to being able to game the existing system. As a result, many will be reluctant, or indeed unable, to change themselves or the system.
It is easy to sit back and write a post such as this, based on 45 years of experience, but it is way, way harder to implement. It will take focus and determination, and some very tough choices to succeed. When you need some assistance, call me.
Header photo credit: Notre Dame rebuild. Diane Worland via Flikr.
