Has ‘The Bug’ created an organisational crossroad?

Mar 16, 2020 | Change, Strategy

 

 

My eldest son has been talking to his employer for some time about remote working.

He and his family wanted to get out of Sydney, with its attendant challenges, and have a simpler lifestyle.

Problem has been, the simpler lifestyle also limits the job opportunities, particularly in the relatively narrow field where he has developed experience  and expertise.

He conducted an experiment, both for himself and his employer, by working remotely for 6 weeks, from Tasmania. His boss was happy, as was he, and so the idea flourished to the point where he sold his unit a couple of weeks ago, just after his boss’s boss informed them that remote working was not on the agenda, and not acceptable.

This was all before the great dunney paper rush motivated by ‘The bug’ over the past few weeks.

I wonder if the attitude has changed? I know Geoff and his family are committed, and in the absence of a job, will move anyway and try their luck, cashed up as they are.

What does Geoff’s employer have to do to make remote working a part of the way they work?

They have to undergo a digital transformation,  supported by a cultural one. In a global company in a regulated market, this is not easy. In fact, the only easy thing about it is to kick the can down the road, so it is someone else’s problem to solve.

However, Millennials are not the same as us baby boomers. They are looking for something more, and are very mobile, risk takers, and unlikely to stay with an employer who does not meet, or even try to  meet their needs.

I have prepared a list of the elements  Geoff’s employer needs to think about, if they are to transform, and have the chance at retaining the training, commitment and intelligence Geoff, and his cohort bring to the table.

  • Change of this nature requires leadership and overt commitment from the very top, cascaded through the organisation. This means that there is a mandate to change from the top, and the necessary resources and leadership are made available. When change is slow, or not forthcoming, the leadership needs to remove the roadblocks, ensuring the ball keeps rolling, building momentum.
  • All stakeholders need to understand the reasons for  the change, and the value that is created by the outcome. In the absence of an articulated reason for the change, it will stutter.
  • Organisation structures need to change from vertical siloes to cross functional collaboration. While this is organisationally and operationally difficult, it is logical, as the customer does  not care which part of the organisation addresses their needs, they just care that it is done in a timely, reliable and efficient manner. Organisation structures have to evolve to reflect the customer journey, they can no longer dictate how that journey will be fulfilled. Siloed organisation structures generate ‘transactional friction’ for customers, and the millennials amongst them generally will no longer tolerate it, so they will go  elsewhere.
  • These changes are not a digital transformation, they are an organisational transformation that uses the evolving digital tools to add value to customers. Too many become obsesses with the tools, when it is the outcome that counts.
  • Transformation of any type ultimately boils down to the people, it is them who will engage and push the cultural transformation needed, it just requires the permission and tools to do so.
  • Somebody, somewhere, has to build and approve the business case for all this. Change is risky and potentially expensive, but is a necessary part of commercial sustainability. In the absence of a business case that finds a way to articulate the desired outcome, in a manner that everyone understands, the change process will grind to a halt under the weight of the status quo.

The bug may be the catalyst that kick starts remote working. If I was a share market punter, I would be tumbling all my spare cash into businesses whose product was enabling this move. Zoom,  for example, as well as the integrated cloud systems, Microsoft, Cisco, Zoho, et al. My son is well down in the pecking order of a very large corporation, and seemingly irrelevant to the success or otherwise of the organisation, but losing him, and others like him, will slowly rot the business from the core.

 

 Header cartoon courtesy Mike Luckovitch

How to make better decisions, more often.

Feb 13, 2020 | Governance, Management, Strategy

 

 

A decision is a choice, made in the face of a problem.

Problems, at their core, have only two sources:

Uncontrollable events.

Flawed processes and their application.

These two sources have entirely different paths to a solution.

Flawed processes need to be subjected  to some sort of continuous improvement program, resulting in a clearly articulated process that can be taught. This improvement process can become a normal part of activity, given the appropriate leadership and focus. A key part of the improvement process is the application of critical and creative thinking. Having a highly optimised process is not the same as having a truly effective one.

Uncontrollable events are entirely different, by their nature, are very difficult to unable to be forecast. They emerge with little if any warning, generally from the outside of an enterprise, so the solutions need to be arrived at in an entirely different manner.

Two factors contribute to the options facing us as we set out to address these random events:

  1. People put far more weight on the problem directly facing them, than even a much more serious problem that has little short term impact. It is also true that most people have a better idea of the dimensions of a problem that directly impacts on them, than others that may carry more corporate clout, but are do not directly affect them.
  2. We can only deal with a very few problems at once, we simply do not have the cognitive bandwidth to deal effectively with a number at the same time.

Therefore, considering these two factors, it makes sense to democratise the manner in which we deal with problems. In other words, enable those who face the problems to deal with them by giving them the resources and responsibility to do so, within clearly understood boundaries.

Two mental models to consider.

The first is a pyramid, full of problems. If the only person who has the power to address the problem, is the one or two at the top, only a few will be addressed at all. Democratising the power to address them enables others at lower levels to address those problems they directly face, so it follows that many more will be addressed. There may be some stuff ups on the way through, but overall the outcome will be beneficial. However, most corporate cultures make this very challenging, built as they are on a hierarchical structure.

The second is also a pyramid, but turned on its head. In this case, the base of the pyramid is facing outwards, towards the customer and various elements in the supply chain with whom the operating personnel have contact. This is where most of the operational problems occur, so give them the resources and power to fix them.

Do these seemingly simple things, and those usually seen as the bottom of the hierarchy have the opportunity to address the emerging problems as they are molehills, before they turn into mountains. It does however necessitate the devolution of power from the top of the organisations structure, and all the way down through and across the functional silos. This may be a scary prospect for most, but it enables the enterprise to be agile and efficient.

The impact of this sort of culture shift cannot be underestimated. It does however take a special and unusual strength of leadership to enable the change to evolve.

US general Stanley McCrystal achieved  stunning results in Iraq with one of the most rigidly hierarchical of organisations, the military, so you should be able to do it. General McCrystal’s experience is recorded in his book ‘Team of Teams’ which is a compelling account of a culture being turned on its head.

 

How do you reconcile conflicting statements by geniuses?

Feb 10, 2020 | Governance, Strategy

 

‘If you cannot measure it, you cannot manage it.’ Peter Drucker.

‘Not everything that can be counted counts, and not everything that counts can be counted.’  Albert Einstein.

How can both be true?

The first is half true, the second is absolutely true, which leaves us with a problem, if it is not measured, how can we manage it?

A lot of things cannot be measured, good parenting, the enjoyment you get from watching a great game of football, business culture, the likelihood of a new product succeeding in a non-existent market.

Take that game of football, the statistics tell one story, the game as watched may tell another entirely. The stats do not reflect the quality of the game.

What about the future, how do you measure that?

Tough call.

You cannot measure what has not happened, but you can draw inferences from all sorts of variables, quantitative and qualitative.

Digital has driven a bias towards quantitative, all we hear about is A/B testing to the point where we feel diminished if we do not do it. However, this mad reliance on the quantitative is a nasty illusion,  a mirage, leading many astray. Qualitative has a huge place in telling the future,  it is a way to fill in the behavioural blanks, to imagine what may happen  in a given situation.

Qualitative research can be an aid to the intuition born of experience, and domain knowledge, factors not able to be quantified. It is also a great way to surface the questions that need to be asked in a following quantitative process, which is useless without the questions that go to the heart of the drivers of the behaviours being quantified.

Qualitative research when done well, and unfortunately I have seen it done poorly more often than well, digs into  the psychological and motivational aspects of behaviour. Not just what we do, but why we do it, and what might we do in the future.

The missing ingredient in most ‘future-telling’ exercises, usually called ‘forecasting,’ is the wisdom born of experience. Frederico Fellini once quipped that ‘experience is what you get while looking for  something else’.

It seems to me that wisdom, and the insights that emerge from that wisdom, come from a lot of experience.

 

Mistaking growth for optimisation can be terminal

Feb 5, 2020 | Change, Strategy

 

Generating rapid growth in a business entails a constant choice that simply must be made, but is usually missed.

It is the choice between ‘growth’ and ‘optimisation’.

They require different skills, strategies, and resources.

Let me explain.

‘Growth’ implies something less than a double digit year on year increase. While that may stretch resources, it is often  ‘Doable’, while very challenging. ‘Rapid growth’ is much harder,  requiring the acquisition of many new customers, assets, movement into new markets, product or geographic areas, and a higher risk profile. It is often aspired to, even budgeted, but is relatively rare.

‘Rapid growth’ is also usually very scrappy, you are fixing things on the run, adding resources, are short of cash, and so it requires people comfortable with ambiguity, uncertainty, and a drive to do new stuff.

By contrast, optimisation is taking what is currently done, and improving it, bit by bit, on a continuous basis. The scrappy, seemingly undisciplined and almost random frenetic activity of a rapid growth enterprise makes them uncomfortable.

Think about Olivetti, the king of the typewriter market.

They made wonderful typewriters, best in the business, optimised continuously for 75 years. Into this mix comes a scrappy unreliable substitute, the word processor and attached printer, that costs more than an Olivetti, and does not deliver the same quality of output.

To Olivetti management, it was less than a threat, more of a nuisance, that would soon go away, so they continued to optimise their machines, rather than recognising that the scrappy, word processor would rapidly steal not only their market, which was typing pools, but destroy them, and create new ones. The word processor was an entirely different  tool, one that gave everyone the ability to type and print from their desk, a much quicker, more flexible, and hugely democratising change in organisational life. Olivetti was obsessed with their machine, not seeing the customers as anything more than users. Word processors gave everyone a power that had been concentrated in the executive suite, creating a terminal strategic change that Olivetti failed to see.

Is your strategy clearly making the distinction between optimisation and growth, as they are different beasts, requiring different capabilities.

 

Header photo courtesy Paolo Bpnassin via Flikr

 

 

 

How do you become a local overnight success?

Jan 6, 2020 | Change, Strategy

 

The great irony of the moment is that we have never been so ‘connected’ but so alone.

We are both connected and isolated by the digital tools that have emerged. This contradiction is slowly leading to the emergence of hyper-local initiatives that have the objective of reversing this trend, at least in their communities, and recovering some of the human contact at the core of our humanity.

I have spent a bit of time recently thinking about this challenge, as it seems to me that  ‘going local’ rather than reflecting the ‘go Global’ mantra is a strategy with real opportunities as we enter a new decade. The idea just ‘feels right’, an antidote to the relentless focus on breadth of relationships typified by ‘digital friends,’ at the expense of the depth of the relationships with a small number (Dunbar’s number) we evolved with.

The foundation question is: can it be commercially sustainable?

Hopefully a number of modest efforts I see around me currently underway with a small scale finished product in a limited geography will give some answers. The broader question, of what it requires to be ‘locally’ successful in a globalising world has caught my attention.

Following are 6 factors that seem to be worth your consideration.

Purpose. It is just a necessary for a micro geographic effort to  have a clear and attractive purpose articulated,  as it is for a global aspirant. Just because you are focussing attention just down the street does not absolve you of the necessity of articulating why that person down the road should care.

Business model. As for purpose, a commercially viable business model is required that is sustainable from the locality. Scaling is always a question, and the business model should be fit for purpose which includes the possibility of scaling, but first, it must be locally sustainable. Build your business model with this notion of locality scaling in mind from the outset, so should it become a viable option, you are ready.

Have a compelling value proposition. Marketing is about stories articulating the value to be delivered to which the audience relates. Without one, local or global, you are just another urger flogging a product. However, at a local level, where word of mouth is ultimately the determinant of success, it is even more vital.

Community engagement. Targeting a specific community with a product requires that you engage on a very personal level. You simply do  not have the luxury of numbers to service the revenue needed to run the business, so engagement on all sorts of levels is necessary. Gaining acknowledgement, engagement and  credibility in the community you are seeking to serve is essential. I suspect there is a tipping point that may become evident only with the benefit of hindsight.

Sustainable competitive advantage. Success locally will breed copycats originating in kitchens and garages around the locality. Price will be their only competitive weapon, to  be successful, there must be something else, not easily copied, that adds value. Competitive advantage is essential in any business, but sometimes in a larger scale, the urgency will be covered by the available numbers of possible customers. On a local level, this camouflage is not available to you.

Access. Communities work on reciprocity, the mutual benefit that comes from collaborating, and  trusting other parties in the community. Facilitating this communication and accountability loop will be  a foundation of success over the long term.

Becoming a success in any context is never an overnight thing. How often have we seen someone called ‘overnight success’ come after a decade or more of toil?.

 

 

 

January 1, 2020. An introspective.

Jan 1, 2020 | Personal Rant, Strategy

 

It is the end of another year, in fact a decade.

‘What have I achieved’ seems to be a fair question.

For 24 years I have worked as a ’boutique’ consultancy. Some may think this is  just another word for ‘one man band,’ and they would be correct, however, there is a difference between my situation, and that of many ‘one man bands’

I chose it.

24 years ago, I took a strategic decision that after having a corporate career that ended abruptly, and then failed to restart, that I would  not play the corporate game again.

As I searched for a job that would both satisfy my aspirations and curiosity, while supporting a young family, people were coming to me for advice, and assistance. For 12 months or so I obliged while focussing on the job search, before the penny dropped.

I liked it  this way.

No corporate framework that dictated my life, over which I had limited control.

No fixed income that just demanded presence, along with sweat and actions that were not necessarily adding value.

No responsibility for things, processes, or people I had not chosen.

No position of institutional power and influence.

No institutional resources available to be deployed with no personal financial commitment.

No built in structures by which to manage my days, weeks and months.

On my own, utterly irrelevant to most passers-by.

On the other hand:

The kids have grown up, are educated, and pursuing worthwhile and satisfying careers

The house is paid off,

And, perhaps most importantly, my time is my own to deploy as I see fit against my personal priorities that deliver intellectual and financial returns to my family.

Over that 24 years, there have been times of plenty, and times of drought. A range of former and current clients in all sorts of industries, facing all sorts of challenges where I have been able to add value, several contract general management stints, partly proving to myself that I can still manage and lead effectively inside an institutional framework (although my dislike of silly rules and deluded people just gets another boost) but through everything, is the strong thread of doing only things that added value directly. No politics, no corporate bullshit, and, plenty of satisfaction.

As a side gig, the StrategyAudit blog, now a decade old has in excess of 1,800 posts, some of which are many years old, but still attract readers and commentary day in and day out. Those posts and the research material behind them is a bank of intellectual capital that is irreplaceable to me, and of considerable value to those who have taken the time to read, follow, and often comment on them.

I turn 68 in a few days, but do  not  feel it, and while I may look a bit weathered, most are surprised, and I am told, I generally do not act my age. However, that has been a continuing response since I was about 10. I can still hear my old dad intoning: ‘For heavens sake, act your age’

Meanwhile, Australia’s east coast burns after decades of self-serving neglect, an  institutional tin ear turned towards the science,  and decisions that reflect the political view that long term planning is limited by the electoral cycle.

In spite of the fire inspired gloom, and for some, desperation, of this new years day, have a happy and prosperous 2020, and I look forward to the coming decade.