Jan 3, 2013 | Customers, Management, Sales
Some informal research I completed recently amongst businesses in my “patch” turned up a surprising result.
One the questions I asked was “what is the most important job in your business?
The surprise was that so few respondents nominated “sales” at all, let alone in the top three.
When you think about it, without sales to pay for the apparently more important functions like, HR, Marketing, OH&S management, engineering, NPD&C, and all the rest that got a mention, all those more fashionable functions will not be around.
Has “Sales” become its own metaphor?
Sales is often an entry level role personified by the keen young bloke (or gal) with the brief-case, glib tongue, and “crash or crash through” attitude to human relations, and as a result is being left behind in the corporate furr-ball. Do well in sales, and you might be promoted to marketing.
Perhaps we should rename sales “Revenue Generation”. Call it what it is, focus more on those carring the direct responsability to conduct conversations with those who write the orders, and perhaps that might focus the mind a bit better?
Dec 18, 2012 | Change, Governance, Management, Social Media, Strategy
Like most newspaper groups, Fairfax has failed to evolve to accommodate the depredations of the digital revolution. Their business model is broken, and the way forward is unclear.
The one spot of light in a gloomy future was the NZ auction site “Trade Me” which Fairfax bought for $700 million in 2006, then floated 34% onto the ASX, and a further 15% last year, raising $422 million, leaving them with a 51%, share which they are now selling for $616 million. The proceeds of the sale, are being used to pay down the debt accumulated to keep a redundant business model alive, offering an opportunity for it to change before being terminal.
Trade me was delivering profitability, superior return on funds, and an important toe in the digital water, but is being sacrificed to keep the legacy business afloat while it tries to adjust. In addition, Trade Me, along with Fairfax’s other less prominent digital assets offer the opportunity to experiment, test, to learn how to survive and compete in the digital environment.
The lesson in all this is that if you do not cannibalise yourself, somebody else will accommodate, and the pain of chewing your fingers will pale into insignificance against the pain of being chomped around the waist by a white pointer. The irony however is that the only digitally sustainable asset in the house has to be sold to buy some time, but leaves the business without any significant cash generator in the digital space. At least Fairfax shares rose yesterday, so directors are probably happy this morning.
Dec 4, 2012 | Leadership, Management, Strategy
Listening this morning to a discussion about the value of a review of the GST sharing regime currently in place, a small part of the GST regime, I was reminded of the geometric nature of the complications that arise from complexity of a system.
The greater the amount of data, the greater the opportunity for analysis, apparently. However, the greater the amount of data, it usually follows that the level of complexity also increases, and as complexity increases so does the number of interactions, and cause and effect relationships that need to be anticipated and interpreted.
Unanticipated relationships that have an impact on the performance of the system, but have not been “risk-assessed” can create a huge risk to systems, simply because they are not in the rule-book. The system is supposed to be “fail-safe” so the response to an unanticipated situation is not enabled. Remember Lehmann Brothers, a massive institution that on paper was AAA, but in reality was so complex that risk was not easily assessable except with hindsight.
Finding the needle gets harder as the pile of hay gets higher, and the complexity of hay-stack increases.
How complex is your business model?
Dec 3, 2012 | Management, Uncategorized
A really good explanation of the Kickstarter process.
Crowdfunding is not the new panacea for new ventures to raise money, you still need a robust business plan, the right people, and a value proposition that really works, but it is an option not available just 2 years ago.
Astonishing evolution of a funding option.
Dec 3, 2012 | Leadership, Management, Marketing
Can’t see the forest for the trees!.
This is a pretty common expression, almost a cliché observing that the pressure of the detail overcomes the view of the whole.
However, a tree is a part of the foundation of the forest, in the same way a single challenge or task is a part of a whole project, and it plays a role in the “fabric” of the whole.
The challenge is to see both the forest and the tree, the forest offering the context, the tree offering the vital details and relationships between the details, at the same time.
Failure to see both, and manage ambidextrously, will compromise both.
Nov 29, 2012 | Leadership, Management, Strategy
We measure return on the capital investments we make, there is an extensive, well understood, widely used set of tools that offer a framework for the calculations, most of us would be lost without them.
However, whilst we all know in our guts that there is a set of practices that together we would call great management, and the businesses they run are better than those run by “ordinary” management, there are few tools available. Trouble is, articulating what make great management has been a qualitative process, significantly informed by hindsight.
So what are the characteristics of superior management?
Seems to me there are three characteristics, that are all the result of extensive sets of individual and group behaviour:
- A well executed strategy that differentiates in a manner customers value
- The management team is a cohesive, but questioning bunch of trained, intelligent people who have a strong sense of team competitiveness. This characteristic is reflected in the groups that exist at all levels of the organisation.
- There are appropriate measures that drive continuous improvement throughout the organisation
For comparative purposes, the Worldmanagementsurvey.org site carries an extensive database with the results of a multiyear, multinational academic survey that offers an opportunity to benchmark management performance. It offers an opportunity to start the process of identifying the behaviours that lead to superior performance by management.
