Feb 5, 2024 | Change, Leadership, Strategy
‘Going digital’ sounds easy.
Sadly, it is not.
Almost every company I visit or work with needs, to one degree or another to be aggressively moving down the path towards ‘digitisation’.
Just what does ‘digitisation’ mean?
For most of my clients it means automating some or all of the existing processes driven by bits of unconnected software and spreadsheets, liberally connected by people handing things over.
It is a mess, and there is not one, or even a suite of digital measures that will address the whole challenge, despite what the software vendors sprout.
The world is digitising at an accelerating rate, so keeping up is not only a competitive imperative, it is a strategic necessity. Never more than now as ChatGPT burst onto the scene, compressing everything, and making the ‘digitisation’ drive one of life and death.
On of my former clients is a printing business, an SME with deep capabilities in all things ‘printing’ that enabled the company to be very successful, in the past. Their capabilities are terrific, cutting edge, if we were still in 1999.
If I use them as a metaphor for most I work with, there is a consistent pattern.
- They did not see Digitisation as an investment in the future, rather it is seen as an expense.
- There was no consideration of the application of digital to their product offerings, beyond the digital printing machines, and services beyond those that made them successful 20 years ago.
- Their business model, beyond what is demanded by the two biggest customers, who between them deliver 34% of revenue, has not changed.
- They have not considered digitisation of operational processes, beyond a 25-year-old ERP system. The system has not been adequately updated, and they only use a portion of the existing capability.
- They have not modified their organisational and operational culture to meet the changed expectations of their customers, and the market.
No digitisation effort can succeed without the support of an operating culture that encourages ongoing change. Organisational processes can be modified by decree, but they will not stick. It takes everyone in the boat to be pulling in the same direction, in unison to make progress. This takes leadership, and a willingness to be both vulnerable internally, and a strong ability to absorb the stuff from outside. The leadership group must ‘get out of the building’. Not to smell the roses, but to see the lie of the land, and understand where the opportunities and challenges are hiding.
Coming to this point, where there is a recognition that change is no longer a choice, is where you are given one point out of a possible 10. Now you need to do something about it all to have a shot at the following 9 points. A daunting prospect for most.
The process has 5 easy in principle steps:
- Map the existing operational processes so you know what to change, and where the gaps/opportunities are hiding..
- Map and change the mindset of the people, so you understand the extent of the challenge.
- Take small and incremental steps along a path that all understand leads to a digital future, which means that a lot of collaborative planning has been done.
- Ensure that there are the necessary opportunities for all stakeholders, but particularly employees to grow and change with you. Those that choose not to, also choose to work elsewhere. There are no free rides.
- Ensure the resources of time and money are allocated uncompromisingly to the long-term outcomes. It is just too easy to put aside something that is important but not urgent, for something that may seem to be urgent, but is not important to the transformational effort.
As noted, since the public release of ChatGPT in November 2022, the time before the liquidator comes around for those who choose not to change has compressed radically.
Most, if not all SME’s beyond the digital start-ups now cropping up like mushrooms after rain, will need outside expertise.
Consider that help to be an investment in survival, not a cost.
Header cartoon credit: Tom Fishburne at Marketoonist.com
Jan 26, 2024 | Change, Governance, Leadership
January 26 again, and out come the strident calls for it to be changed, in one of many ways, as well as the equally strident voices calling for no change.
To me it seems to be just nonsensical chatter.
In any event, January 26 is a confection. Prior to 1935 it was generally known as ‘first landing day’, which it was not, or Foundation Day, which rates as a ‘maybe’. It was only in 1935 that all jurisdictions used the label ‘Australia Day’. If we must change it to satisfy the noisy few who get hot under the collar, the sensible option would be May 9, which is the day the first federal parliament met in Melbourne in 1901.
We should be discussing more important things.
Climate change leading to floods, fire, with pestilence to follow. Another mouse plague perhaps? The impacts of climate change are there for all to see. They are more pronounced than the most pessimistic scientific opinion of a decade ago, and yet at the government level, little is being done beyond lip service and press releases. Private capital is making all of the relatively modest investment occurring, I suspect contrary to our long term best interests.
Covid has not gone away. What about the next pandemic, are we prepared better than we were when Covid announced itself to the world? I see few if any steps that act as ‘insurance’ against the impact of the next pandemic. Press releases will not stop it, when it arrives.
Generative AI has changed our world. I confess to being excited and confused at the same time by the explosion of AI. It is such a game-changer, it feels a bit like watching the industrial revolution happening at warp speed. Depending on who you listen to, true AI, meeting Alan Turing’s test will emerge anywhere between a decade hence, and ‘probably never.’
We are now in a knowledge economy. This is a term thrown around for years, but for the first time for me at least, it really sticks. It begs the question: what is the basic unit of production in the knowledge economy? How do we measure it, organise for it, pay for it in an equitable and sustainable manner, and critically, how do we optimise the utility of the time we allocate to any task.
The impact of the last digital revolution was articulated by Moore’s law, the compounding time frame of which was 18 months. If we apply the same logic to AI, the compounding time frame seems to be about a week. This will result, if it continues, in a logarithmic acceleration of AI tools surging way ahead of the hardware that delivers the physical outcomes. Therefore, the processes that currently consume the time of people will be in the gun, with the hardware lagging. Instinct, experience, in a phrase, knowing where to look to join the dots will be the critical leverageable capability for the good jobs and career paths.
The pressures the explosion of AI brings to the foundations of our country are profound. In our public discourse, these challenges are not being touched on in any way. We prefer to argue about the current but completely unimportant populist nonsense that is irrelevant to the country we leave to our grandchildren.
As an aside to any discussion of AI, there should be conversation about the coming deluge of litigation surrounding copyright. As Newton observed of his breakthrough ideas, he ‘Stood on the shoulders of giants’. Did that standing involve plagiarism under our current laws? Did Da Vinci’s most famous illustration, ‘Vitruvian man’ involve breach of ‘copyright’ of the work of Roman engineer Marcos Vitruvius Pollio? (I ignore for the sake of the debate that the sunset in copyright would have well and truly expired on Vitruvius’s original work). Creativity is a collaborative and experimental process always using the shoulders of others. How we align that reality to the current copyright laws designed for a non-AI world will be a lawyers feast, and a nightmare for the rest of us in the coming year.
The Geriatric election in the US will be impacted by AI. Putin is a capitalist, reputed to be the richest man in the world, but nobody knows where all the money (or bodies) hide. However, he does understand ROI. He can spend $10 billion getting his red headed, narcissistic, sociopathic mate re-elected, and cut off the supplies to the Ukraine that way, or spend $100 billion crushing the armies of the Ukraine, and wearing all the current contributors, distracted as they are by the conflagration in Gaza, down to the point where they back away. While the US election is half a world away, and totally out of our control, the outcome will have an impact on our economy, foreign relationships, and perhaps our way of life.
Our foreign policy is conflicted as never before. We have the China hawks yelling at the doves, while China is our major trading partner, upon whose goodwill our current standard of living rests. In parallel, we are committed to a program of procurement of nuclear powered submarines to protect us from that same vital trading partner. When/if they arrive, they will operate in shallow seas to our north, entirely inappropriate for nuclear powered boats that require very deep water in which to ‘hide.’ That ignores the probability that by the time they arrive, there will be sub detector drones available in Bunnings, and the barrier of building from nothing a nuclear industry to support them was not, after all, insurmountable.
Meanwhile, there is armed conflict in Europe and the Middle East, both of which have the potential to suck us deeper into a morass that makes Afghanistan look like a Sunday school picnic.
The taxation system is a dogs breakfast needing urgent and complete reconstruction. Such a sensible step is way beyond the reach of either of the major political parties, driven as they are by institutions that demand maintenance of the status quo for their own selfish reasons. The lack of voter appetite for change, despite the obvious gaping holes in the system ensures that no real change will happen until there is a genuine crisis.
Last week the PM reaffirmed the legislated tax cuts would come into force as legislated. This was a surprise to me, as I believed there would be changes, aimed more at the bottom end of the income scale. On Monday he flipped, and let everyone know there will be some changes, which will consume much of the political capital he has left. Despite being very modest cosmetic changes, nobody will be satisfied. The various aid and welfare agencies will be wondering aloud, where this government lost its social conscience, as the changes will not go far enough, and the opposition will run around yelling, again, that the sky is falling. Michele Bullock will have pencil poised, ready to point out that inflation will not be helped by the injection of money into the economy.
The housing crisis, one of our own making, will not go away irrespective of how many press releases and Band-Aids are sent around. It is a systemic challenge driven over the last 25 years, and treating it as anything but is a nonsense. Commentator Alan Kohler, who has a way of deconstructing the babble of economists, bureaucrats and politicians into common sense wrote a quarterly essay that contains plenty of sensible comment. If you have an hour, this webinar is useful. Alternatively, this precis on the Michael West media site gives a very good summary in a relatively short read.
Meanwhile the alternative Prime Minister is urging retailers to stock piles of Australia Day ‘merch’ that does not sell. This trivial matter, which is none of his business anyway, is not a contribution to the acknowledgement that we live in a great place, currently celebrated on January 26. It is just a shallow, meaningless, populist, and cynical appeal to grab a fleeting headline, and enrage some who live at the shallow end of the gene pool.
A decade on from this 2013 Australia day post, the observation that in the future, the core challenges to our society I saw then, education, research capability, diminishing manufacturing capability, and the flogging off of our national estate remain. Absolutely unchanged.
Have we not learnt anything?
Jan 22, 2024 | Leadership, Strategy
Tempo.
Everything in life has some sort of tempo to it.
The change of the seasons, the cycles of our lives, the routines we follow often without thought, and the planning/execution cycles in our public, private and business lives.
What has changed dramatically over the last decade or so is the tempo of change. Our commercial, social, and political environments have had a huge dose of steroids injected, radically disturbing the placid status quo that has prevailed. The status quo is now fighting for its life, using any means at its disposal.
Some of this tempo acceleration has been driven by the now obvious impacts of climate change.
2023 was the hottest year on record, climate scientists are now muttering that their worst-case scenarios of a decade ago now look conservative. We are fighting fires and floods simultaneously on multiple fronts.
We are also fighting wars on multiple fronts, all of which have the potential to spread like a viral pandemic.
Much of the balance of the tempo acceleration has been driven by the digital revolution of the last 15 years. The release of ChatGPT into the wild in November 2022 makes what has gone before looking modest.
Look around, those businesses that have done well over the last few years are those that were able to pivot quickly, evolve their business models, and take advantage of the opportunities opened up by the suddenly changed circumstances. Those that fell on hard times were those that for one reason or another, often reasons outside their control, were unable to make those changes.
Once change gets rolling, it builds up momentum, and the tempo of change becomes a real thing. It drives activity, pushing aside many of the objections raised in less heated circumstances. The outcome is that you end up dealing with trade-offs and probabilities in entirely different ways, the impact on individuals and their own agendas seems to be diminished, caught up in the tempo of change.
Tempo, the word of 2024
Header credit: Dave Grohl working up a sweat belting out the tempo for Nirvana
Jan 15, 2024 | Collaboration, Leadership
‘Do not ever patronise me again.’
Those words are seared onto my brain, coming from the mouth of a new boss many years ago.
I had not long been employed and wanted to make an impression. Therefore, every conversation was a combative one, a conversation I set out to win, seeing that as a way to impress.
As the conversation which took place in my office ended, the new boss for whom I had quickly built a strong regard, stood up and walked out. He turned around just outside the door, and walked back a couple of paces, and uttered those words.
‘Do not ever patronise me again’.
He then turned on his heel, and walked out.
I was both astonished, and very concerned. It was only after a painful re-run and examination of the conversation that I realised he was right.
I had, completely unwittingly, patronised him.
What had driven that destructive behaviour?
It took a while for me to understand my own behavioural characteristics. In those days I went into every similar conversation with a point of view that I was prepared to defend aggressively. While I was always prepared to adjust my position in the face of good arguments, this was deeply hidden. In addition, I failed the most significant test of a good debater.
I failed to listen.
My ‘tin-ear’ did not hear a word that was said in any context other than: ‘with me or against me’.
No such thing as active listening, understanding the basis of a differing view, or reflecting on the quality of the foundations of my own.
Later that day I did go into the boss’s office and apologise, acknowledging my mistake, and thanking him for bringing it so painfully to my attention.
We worked together very productively for a decade after that incident in two different companies. We had many debates, and rarely was the outcome black and white, right, and wrong. It proved absolutely that two heads are always better than one, assuming the heads are aligned to the same objective.
Header acknowledgement. My thanks to Dilbert and Scott Adams.
Jan 8, 2024 | Leadership, Strategy
2023 was a difficult year for everyone. Uncertain economic conditions, war, dodgy deals, politicians cuckolded by their own weasel words, and the emergence of AI.
The last one is the only one over which any of us working to pay the bills can have some level of control.
AI has emerged from a long gestation since Alan Turing first made it a topic of conversation 72 years ago. It is now firmly on the plate of every person in business.
Like any tool, it is in the hands of the user, and cannot do any job without being directed. The cookies in 2024 will be awarded to those that best direct AI capabilities in their businesses.
It will not happen by itself, but is one of the secrets of competitive success.
The world is filled with noise and distraction. To cut through and resonate with an audience you need clarity.
Clarity of strategy, and clarity of all your messaging from the advertising and marketing collateral, the stories of the salespeople, to the colour of your delivery trucks, and the greeting of your receptionist.
Clarity.
AI will not give you that clarity in the absence of instruction from you, the user. Lack of such user clarity will deliver generic burble that will be unnoticed wallpaper.
Clarity Wins.
What AI will deliver in spades is the killer tool to leverage that clarity.
Header illustration courtesy DALL-E in about 20 seconds and two sets of instructions.
Dec 18, 2023 | Leadership, Management
At this time of the year, there is much thinking going on in relation to the manner in which incentives will be applied in the coming year, for which you are preparing the budget.
There are many and varied schemes, most of which are geared in one way or another to a threshold, above which the incentive kicks in.
It can be anything from a sliding commission, to share allocations, holidays, and goodies from the local store.
99% of those I see have one common characteristics: they are known, the thresholds are clear, as they are seen as the motivating factor. They can also be gamed in all sorts of ways, particularly by those in sales. When the commission is based on revenue alone, that can be achieved by giving big discounts, the timing of invoices can be varied, ‘channel stacking’ becomes common.
These sorts of incentives are usually ineffective, because they become taken for granted, and are always ‘gamed’ by staff.
In the early 50’s psychologist B.F. Skinner did a series of experiments, using rats and pigeons as subjects, since validated widely. He used a box that became known as a ‘Skinner box’ in which he placed the hungry subjects, and a lever. The rats and pigeons pushed the lever, and could gain an intermittent reward of food. They soon learned that pushing the lever sometimes delivered a reward, so they pushed it more and more, each intermittent reward reinforcing the behaviour. The variability of the reward when it is intermittent tends to increase the speed with which the subjects pushed the lever, a few will keep pushing despite the calorific value of the intermittent rewards being less than the calories required for life.
This behaviour can be seen in any room containing poker machines. Some players will, despite knowing the odds are against them, keep pushing money into the machines, hanging out for the intermittent reward of the clatter of coins in the tray, and the psychological reassurance that goes with it.
Why not use the same sort of thinking to manage your incentive programs?
