Jul 8, 2022 | Innovation, Marketing, Strategy
A former client has been providing engineering services to the fossil fuel industry for decades. Having breakfast with him a while ago, he expressed the view that the prospects for the industry in which his business competes, and thus his business are dismal.
He is right, so long as he continues to see his current capability set through the perspective of how the business has operated in the past.
The challenge is to position yourself to take advantage of opportunities as they arise. Emerging technologies of various types are opening substantial opportunities for which his business has deep capabilities, but which are hiding in an alternative perspective of how those capabilities can be leveraged. Changing the strategic frame through which they are seen provides a path forward.
The challenge of the future is to reposition yourself quickly towards the point at which there is real, monetised value to be added.
You must be prepared to make early bets on those opportunities with the best odds of success in the medium term with a minimum of information by which to make those decisions. Equally, you must be prepared to walk away from the sunk cost when new information emerges which reduces the odds of the expected success.
Stripped back to basics, you must set yourself up so that as clarity emerges you are in a position to accelerate into it.
In my younger days I spent half my life on a surfboard. In a big swell, the position on the wave you took after the take-off was critical. Done right, you were able to accelerate out of the bottom turn into the fastest part of the wave, and, hopefully, make it through the break above you. Get the timing of the bottom turn just a bit wrong, and ‘Wipeout!
It is the same in business, positioning yourself going into uncertainty in the manner that puts you in the best position to accelerate out as it becomes clearer will be the difference between those who make it, and those who do not.
Photo credit: John Morris via flikr
Jun 30, 2022 | Change, Strategy
Promoting change is a major strategic and management challenge. Most will accept that change is a necessary ingredient in survival, but most will also hope it is the other bloke who changes, and they can continue in in their comfortable cocoon.
There are three ways to initiate and lead change, all based on behavioural psychology.
Incrementally.
When you ask people to make minor changes, and provide the background information so the changes seem reasonable, people will usually be prepared to make them. Minor change, on minor change, compounds to significant change is what seems like a short time when you look backwards.
You are not taking people too far out of their comfort zones by making these minor changes.
Anchored.
‘Anchoring’ is a core technique in negotiation that is fed by ‘fixing’ on the first number mentioned. In a negotiation over wages for instance, you often see what amounts to an ambit claim, a huge increase over what you are actually prepared to accept. The process then becomes one of compromising, meeting somewhere in the middle. The higher the starting point, the higher the ‘middle’.
Catalytic event.
When something happens that is an attention grabber, it can be used to demonstrate that the status quo is simply not viable, and change is a necessity of survival. This can be used at an individual and corporate level. Management jargon often uses the term ‘Pivot’.
Steve jobs did it on returning to Apple, by radically reducing the product range, and focussing resources on the ‘Mac’ and development of what became the iPod. Bill Gates executed the biggest ‘Pivot’ in corporate history in 1995 when he realised that the internet really was something big to come, and that Microsoft had almost missed the boat. Gates wrote a memo to all staff that instigated the pivot that in an instant, turned Microsoft 180 degrees.
On several occasions over the years as a contract manager and ‘change-agent,’ I have deliberately generated a catalytic event. On each occasion, corporate survival was at stake, and significant change was essential. Under normal circumstances, the scale of the changes necessary would have been untenable in the absence of the catalytic event.
The management challenge to successfully making change, whichever strategy is used to make those changes, is to ensure they will ‘stick’ after the initial pressure is removed. The tendency to revert to the previous status quo is always very strong.
Jun 8, 2022 | Leadership, Management, Strategy
Much of the volume of paper dedicated to pontificating about strategy these days seems to focus on ‘Purpose’. Sadly, we do not have a workable and agreed definition. What we do have is confusion about the meaning, particularly when you consider the other strategic pontification generators ‘Mission’ ‘Vision’ and ‘Values’
What are the differences, and how do they improve enterprise performance?
In my view, spending time worrying about the differences, and similarities is time wasted. All are words that should lead to four outcomes that will improve performance.
Strategy.
They all provide a framework against which strategic decision can be measured. ‘Does this decision enhance our performance in a way that assists to deliver whichever of the labels you choose to use.
Differentiation.
A well articulated statement of strategic intent, called by whatever labels you choose, supported by overt action can, and does offer the opportunity for a differentiated product offering that will be hard for competitors to copy. This generates incremental revenue, at enhanced margins when done well.
Human resources.
Most people would prefer to work for a company that makes a positive contribution to their community as well as offering competitive pay and opportunity. I have an acquaintance who used to recruit for a tobacco company. His experience was that they had to pay well over the odds, and accept a modest performer in order to keep bums in the seats to get the job done. BTW, I dislike the term ‘human resources’ but have yet to come up with a better one that does not sound confected.
Culture.
This often misused word gives a sense of direction, focus, behavioural norms, common ideals and risk management that enables the building of momentum. ‘Culture’ is the essential glue that holds enterprises together.
You do not need a strong purpose, or either of the other two to have a successful enterprise. Most have survived and prospered to date without one, but there is no doubt in my mind that it helps enormously, however you define it.
Header cartoon credit: Courtesy Scott Adams and Dilbert.
Apr 25, 2022 | Leadership, Strategy
It is Anzac Day 2022, a day we remember those who fought to give us the choices we now have to shape the lives we lead.
In homage to the sacrifices they made, we need to be thinking seriously about the choices we are making that will impact on those who follow us.
Significant in those thoughts should be to think differently about the term ‘climate change’.
It is too narrow a term, implying we just need to be concerned about the immediate impact of CO2 on weather, and the human and capital impacts of those changes.
Instead, we need to be thinking about the challenges more holistically.
The planet we live on is an ecosystem, of which we humans are just a small but enormously influential part. For millennia, the impact we had on the eco system was inconsequential, but that changed with the industrial revolution, and have continued to change at a geometric rate. We suddenly are taking more out of the ecosystem than previously, impacting on the ability of the system to replace what we have taken, to the point where currently we are taking more than can be replaced.
An ecosystem is a bit like an investment portfolio. It benefits from diversity. When the diversity of any portfolio reduces, it makes that portfolio less resilient to outside shocks.
The planets ecosystem is being stripped of diversity, and as it is with an investment portfolio, it has become less resilient, less able to sustain itself. As a result, we are seeing those radical changes in weather patterns, and the consequential changes in climate.
There is nothing we do that does not come from nature. The oxygen we breathe, the water we drink, the foods we eat, the materials we use, all come from nature. We are part of the planets ecosystem, whether we like it or not, and we are consuming the resources of the ecosystem at an unsustainable rate.
Think of it as you would a balance sheet. On one side you have assets, on the other liabilities and equity. When your assets grow faster than your liabilities, you add to the store of equity. When it is the reverse, you deplete equity. The tipping point is when your equity is gone, and you can no longer sustain the difference between the rate in increase of liabilities over the production of assets. At that point you are bankrupt.
We humans have been depleting the assets of the planet unsustainably since the beginning of the industrial revolution, and the rate at which the depletion is happening is increasing. At some point, the music will stop, and subsequent generations will face the sort of dystopian future we see in sci-fi movies.
I think we have reached, or almost reached that point.
On this Anzac Day, as we have a BBQ in the back yard with friends, sink a few beers and stand in circles and throw a few pennies in the air, we should also be considering the legacy of our time in this place, and what we should collectively be doing about it.
It also happens to be my beautiful, educated and talented daughters birthday. Perhaps it is the thoughts of her children, yet to make an entry, that have made me consider the sort of world that my generation is leaving to them.
Mar 31, 2022 | Change, Innovation, Strategy
Management over the last 50 years has been driven by strategic planning. Sometimes it has been done well. Often it is little better than a good chance to catch up with peers, have a few sherbets, and get away from the office for a few days.
After the session, the production of a new plan, and articulation of targets nobody really believes in, life gets back to normal.
Familiar?
The fundamental flaw is that we expect to be able to plan for a future we cannot predict.
This is in no way to ridicule the process of gathering information, generating ideas and views about the way forward, and the means to measure the success or otherwise of the efforts.
Those efforts are essential, they provide the intellectual fodder necessary to at least avoid some of the bigger potholes, and make informed and sensible decisions.
However, they miss the essential truth that planning for a future you cannot predict is bound to miss the mark.
The solution?
Instead of looking for the answers to questions thrown up by analysis of the data we can collect, look instead for questions that need an answer.
Setting out to answer a big question, go exploring the unknown, is way more powerful than figuring out how to change the status quo.
You do not have to be a Steve jobs or Elon Musk to see a big problem that needs solving, they are around us every day at a local level, we just have to see them.
A client of mine is busily solving the dual problems of poor acoustics and heat insulation of our windows and doors using European technology adapted to local environments. I watched a presentation last week by a local franchisee of ‘Bark Busters’. This is now an international business aimed at managing the behaviour of dogs, specifically dogs that bark. Perhaps neither are solutions to global problems like global warming, but both are big problems to those who are in contact with them.
Look for problems to solve, rather than extrapolating the present to a bigger version of itself.
Mar 21, 2022 | Innovation, Strategy
Just before Christmas, I was with my son and granddaughter at a ‘pantomime’ in a local park put on by a local group for the sheer fun of it.
All the usual characters of a pantomime, a wise old man, loving mother, young hero, an innocent victim, and a nasty villain in a black cape were there. The story made little logical sense, but that did not matter a whit. All the kids were deeply, deeply engaged as the young hero seemed to just fall into deliberately placed and progressively ensnaring traps placed by the villain, despite the advice of the wise old man, entreaties of his mother, and roared warnings of the toddler crowd, and their grandparents.
It struck me that the whole engagement of the kids, driven by the innocent victim being progressively drawn into the villain’s web, was a metaphor for successful marketing. This is especially the case for a small outfit going up against a larger and powerful incumbent.
Make the incumbent the villain, demonstrate that the gorilla is not solving problems that nobody may have even thought about to date, but once articulated, can become a cause celebre.
One of my clients is a small company delivering double glazed uPVC windows and doors to residential clients. The benefits of double-glazed uPVC are significant. The reductions in power bills and noise by increasing thermal and acoustic insulation via sealed double-glazed windows and doors are enormous.
uPVC is relatively new to the Australian market, but increasingly making ground, as the huge benefits become known. However, the incumbent aluminium and wood window and door suppliers still control 98% of installations, flogging products with little thermal or acoustic insulation at all to unsuspecting ‘victims’.
Our villain is those producers who continue to deliver substandard product, simply through momentum and lack of regulatory standards.
Who or what is yours?
