“Intellectual Capital on demand”.

Jun 15, 2012 | Management, Operations, Small business, Strategy

This is a term coined by Peter Drucker when talking about contract management, particularly in relation to older contractors who bring a wealth of experience and hard won wisdom to the table.

Using contractors, particularly high level ones brings a number of huge benefits:

  1. Turns a fixed cost of an employee into a variable, project specific  cost.
  2. Easier to impose specific performance measures, as the responsibility of the contractor is to the task, and less to the cultural environment.
  3. They bring immediate resources to projects otherwise difficult to staff
  4.  Offers the flexibility for enterprises to bring in specific skills from time to time, that they do not need all the time.
  5. Generalists, and those with a wide experience, are better at seeing how logically unrelated pieces may fit together, they are less concerned with ambiguity, than specialists, and less likely to “anchor” an analysis in their specialty, and narrow perspective.

Our economy is undergoing structural change, management productivity is under scrutiny, so it makes sense for businesses, from start-ups to huge multinationals, to take advantage of the big pool of highly experienced, mobile, and motivated older contractors.

7 steps to Data Literacy.

Jun 7, 2012 | Management, Marketing, Small business, Strategy

Anyone who can read can read a Keats sonnet, but not everyone can “see” the lyrical quality, and feel the passionate introspection most have at their core. Those who can are truly literate in English poetry.

Data Literacy, a term I like, similarly implies not just an analytical capability, but also an intuitive capacity to understand the nuances and hidden gems in data, rather than just the capability to be informed by apparent outcomes.

Have you ever seen people making stupid decisions while pointing out that the data justified them?

I see it all the time. It seems to me that there should be a knowledge building chain here, rather than just a data analytical one:

    1. Gather data,
    2. Analyse data,
    3. Apply healthy skepticism to the outcomes,
    4. Gather more, preferably counter intuitive data,
    5. Pursue the trends, outliers, inconsistent data, apply informed analytics rather than statistics,
    6. Synthesis of the complex, often paradoxical information,
    7. Informed intuition, and data literacy evolves.

Not all numbers are equal, some are more reliable and informative than others, simply because they are the result of tested assumptions, and more and better informed questioning. The development of literacy takes time, effort, and resources, but is worth it.  

A sense of shared purpose.

Apr 3, 2012 | Leadership, Management, Small business, Strategy

A small manufacturing business I work with, operating in a domain now dominated  by a few huge retailers, and cheap imported products, is facing a dilemma.

Three key people are leaving at pretty much the same time, for different reasons, just with difficult co-incident timing. This is a small business, there is no “bench” of executives who have been mentored, trained, and nurtured so that they can step in at short notice, no such luxury in an SME to whom every dollar of cashflow is critical to survival . 

The purpose for this business to exist is to showcase the great products coming from Australia’s food basket, the Riverina, this is what makes them different, and gives all stakeholders, customers, suppliers, employees, and those who fund the business, a reason to keep on supporting it through the current challenges.

It seems that the opportunity presented by this sudden and unwelcome personnel churn is to start again, almost from scratch, to rebuild the processes, and renew the sense of shared purpose amongst the employees. That task however, is a bit like getting to the top of a sand-hill in a desert, and seeing just another sand-hill rather than the expected oasis. 

The key distinction between leaders and managers is that leaders find the grit to climb this extra sand-hill, ways to  bridge the gaps between peoples differing experience, expertise, and expectations, so that there is a shared purpose that is larger than an individual. Leaders are not leaders because they are always right, but because they listen, learn, and enable others to do the same. That is the opportunity facing my small client, to be a leader, and to remain one of the very few Australian owned food manufacturing businesses left.

 

Crowdsourced funding for SME’s.

Mar 26, 2012 | Collaboration, Innovation, Small business

Blogs, facebook, web sites, and e-books have all bypassed the mass model of publishing, enabling huge numbers of people a creative outlet not available before 2000, but there is still the need for seed-funding. Raising the modest amounts of money to try and commercialise creativity has become a whole lot easier with the birth of Kickstarter, a crowdsourced funding platform for creativity.

Kickstarter is an interesting model. It calls for pledges for a project, a target and a time frame. When the target  is reached, the credit card pledges are activated, if the target is not reached, they lapse. In this way, it creates micro finance for creative projects. The social media collaboration between the site, and facebook enables a “fan-base” to be developed, creating a market at the time the pledges are taken.

A challenge to this type of funding being extended to commercial operations is the hold current legislation gives ASIC, intended as a protection against snake-oil salesmen. The same challenge exists in the US where last week congress passed legislation to enable crowdsourcing of funding up to $1 million/year from a small unaccredited investors, and $50 million for established private companies before having to register a prospectus with the SEC. 

Both are very good ideas, that should be translated to Australia where SME’s have great difficulty raising money, and the hurdle of having a prospectus approved by ASIC is very high indeed. The potential for growth enabled by access to funding by SME’s has to be substantial, providing a kick to the economy.

Sell the frog.

Feb 23, 2012 | Communication, Sales, Small business

 Successful stories are always greater than the sum of their parts.

Great stories engage, enlighten, inform, and inspire, so to dissect the sum to explain the parts may seem easier than selling the whole thing, but it usually does not work. Telling the big picture, the big idea, the big picture, is a key to selling.

Try describing how a frog jumps to someone who has not seen one jump by dissecting it. You can describe the long legs, musculature, power to weight ratio, but that does not help much, better to show them the frog jumping.

What’s coming for 2012?

Jan 2, 2012 | Leadership, Personal Rant, Small business, Social Media

It is the time of year for predictions and reviews, so here is my shot. Three general predictions, and one very specific one, followed by a review of my predictions of this time last year.

    1. The barriers to communication are falling so quickly, that a raft of tools are emerging that will change the way we consume. Collaborative Consumption is emerging as an economic driver that  will change the mechanics of many industries, and create new ones. Companies like Zipcar remove the need to own a car, particularly useful for inner city residents, Swaptree replaces the sale of Ebay with a swap, something you have but no longer need being swapped with someone with the opposite.
    2. Small is good!. Starting a new business has never been easier, and they are popping up all over the place, replacing and renewing all sorts of services. All that gets in the way of all this new activity is the institutional barriers in place from last century. If you need a bit of money to fund a good idea, and the family and friends, the traditional source, are wary, try Kickstarter.com, where money is pledged to good ideas.
    3. The wisdom of the crowd is slowly being recognised, but the pace is accelerating rapidly. This idea, first comprehensively articulated by James Suroweicki, the New Yorker columnist some years ago is gaining amazing traction in management practice as its self evident truths are incorporated into activity. The next step is to assemble this wisdom from the electronic fingerprints we all leave across the net. Scary to some from a privacy perspective, enormously productive from the factory floor to the boardroom and political forums.
    4. The Mad Monk , Opposition leader Tony Abbott will not make it to the end of 2012, but will be replaced by Malcolm Turnbull, who appears to be on of the few in the Parliament who actually listens to the facts, and acknowledges that ideological solutions to the complex problems we face are just too simplistic to work, but that we need a consistent philosophical foundation to the decisions that are made, rather than a response to a focus group. 

 

 

At the end of 2010 I made some observations and predictions, so how did I go? Generally, the trends identified here I believe will continue,  with the exception of the first one, which is now appears likely to be very wide of the mark.

    1. We may regret the increase in “touch” devices as we use them to replace human contact. Jury is still out, the growth of touch devices has been amazing during the year, and shows no sign of lessening,  but there is little evidence that my concern about the humanity in relationships being eroded is valid. Score 2/10.
    2. Global retailing takes over. It seems the e-tailing revolution is really here, now you can find and buy just about everything on the net,  from books and electronics to whitegoods, cars, and even love.  Score 7/10. marked myself down a bit because it was so obvious.
    3. Net advertising will overtake traditional advertising. I  have seen conflicting numbers, so who really knows, but I suspect it has happened, and when you add in the growth of “content” posted on sites like u-tube, that are not paid advertising, but have a marketing objective, there is no doubt paid advertising in “traditional” media is now behind advertising/advertorials on the net . Score 7/10.
    4. Social media comes of age. Got that right, the quickest growing demographic on social media is 50 plus, often connecting with scattered grandchildren, then discovering  SM is a great tool for all sorts of other things. Score 9/10.
    5. The cloud rolled in. Again, got it right, the hype around the cloud appears to be turning into investment, not just so institutions can reduce their costs, but because change is so rapid, it is now easier to keep up on the cloud. Most are finding it is not cheaper, the money just moves from the balance sheet to the P&L, but far more flexible, and responsive to change. Score 9/10
    6. Data mining will gain momentum. This happened, and is still happening, but slower than I thought it would. I suspect the growth in the cloud, (5) and crowdsourcing  (7) will provide significant momentum. Score 6/10
    7. Crowdsourcing will emerge from the shadows. This is certainly a trend that accelerated through the year, and is still gaining momentum. Everything from NPD, to project management, graphic art, sales lead identification, and customer service delivery. Score 7/10, just because it it taking a bit longer than I expected.
    8. Two speed Australia became accepted, even if two speed now appears to be a much more complicated mix than just 2 speeds. The  added complication is the financial crisis in the Eurozone, and the knock-on impacts that could have on Australia’s economy as exports from to Europe and the US from China slow. This is a truly scary scenario. Score 7/10.
    9. Climate change and the political response. With the exception of Australia, with Bob Brown calling the shots in Canberra, climate change fell down the agenda in developed countries in the face of financial woes. Companies may be working slowly to adjust their  activity mix, but politicians are more concerned with re-election, and are taking populist positions rather than taking the really hard decisions that will alienate large parts of electorates. Score 6/10
    10. The push for regulation. Got that right, often by stealth, regulation is coming back as a strategy option for governments everywhere. In Australia the most obvious is our workplace legislation. Got that right, 9/10. In December, 2011 it was announced that “Fair Work Australia” would undergo the promised review of its effectiveness, chaired by the new minister Bill Shorten, who has already announced his view that we are leading the world in workplace regulation. My bullshit meter hit overdrive when I saw the press release, as it is clear that the regulations are stifling innovation, risk taking and productivity, and are simply an acknowledgement to the “left” whichever party they belong to . There are several others, like the so called “Road safety Remuneration Bill” which is really just a government sponsored grab for power by the TWU, and promises to cost the community heaps, and put even more small transport operators out of business, but are travelling under the radar.

Overall, I give myself a pretty good pass mark.

 

Hope 2012 is a good one for you.

Allen