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 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 17, 2024 | Analytics, Strategy
Imagine. Possibilities.
‘Strategic thinking’ has been overtaken by the ‘quants’.
Those that believe that by generating loads of data, analysing past events, behaviour, and outcomes, you can create a model that will give answers to the key strategic question: How best to deploy limited assets for the best return’?
Aristotle 2,500 years ago observed that in some things the past will always be the same as the future. Think about gravity. We know it will be there tomorrow exactly as it is today.
Your task in this case is to identify and quantify cause and effect.
Aristotle also observed that in other things it is not the case that what happened yesterday will be repeated today. In that case, you must form hypotheses, test them, learn, then rinse and repeat.
In other words, you need to imagine possibilities.
Look at the evolution on the mobile phone for evidence. On January 9, 2007, Steve Jobs officially announced the original iPhone. On January 10, 2007, despite luminaries like Steve Ballmer poking fun at it, all preconceptions about what a mobile phone was, were out the window. The past was not representative of what the future would look like.
The world is a messy place, today rarely looks like yesterday. In that messy place our task is not to look at the past and project onto the future, our task is to imagine possibilities.
Strategy development is all about imagining those possibilities, making choices on what appears to be the best bet, and putting your money down, adjusting as necessary as more information and insight are gathered.
Aristotle did not conceive the OODA loop. He left that to John ’40 second’ Boyd 2,500 years later, but it was inherent in the ‘scientific method’ he articulated, and should be required learning for every decision-maker.
Header is a representation of the ‘Johari Window’, made famous by Donald Rumsfeld
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.
Jan 5, 2024 | Change, Strategy
The Christmas break is a good time to have that delayed conversation with mad Uncle Charlie. Good old Charlie is a Luddite that the originals would have been proud of, we all have one somewhere. The conversation was about AI, a topic in which I claim little expertise beyond the bits I have read, and superficial fiddling I have done.
However, Charlie was adamantly opposed to any notion that AI was anything more than a gimmick used by computer companies to sell their devices.
In trying to make the case for the continued growth of AI, and stuff emerging, I used an old chestnut.
Compounding.
As Einstein observed, compounding is the most powerful force in the universe. The story of the peasant who did a favour for the emperor and was rewarded with anything he wanted and asked for a chess board to be covered with grains of rice, doubling at each square explains it. At casual observation, easy, but the maths is different. There are 64 squares on a chess board. Doubling the gains at each square ends up in billions of grains of rice. The first few are easy, 1,2,4,8,16, but after a modest number of iterations, the numbers really take off.
Digital transformation is similar.
One step compounds on top of the next, and next, and so on, until you recognise it is not a destination, it is a journey.
Fascinating to think we are at the very beginning of the journey.
An idea that has been attributed to many is that we overestimate what can be achieved in the short term, and underestimate what can be achieved over a longer period.
This is compounding at work.
If you think the developments of the last decade have been huge, unpreceded in history, I suspect the next one will make the last one look like it was snail’s pace.
Charlie has his good points, but he really is a devoted Luddite.
Header graphic is via DALL-E. A Luddite trying unsuccessfully to stuff AI back into its box.
Jan 1, 2024 | Governance, Strategy
I cannot believe another year has gone by. The older I get, the faster time seems to go.
As I considered how to articulate the emerging landscape that will be 2024, two headline items screamed at me.
Strategy, and governance.
Without a solid, deeply considered and articulated strategy, you resemble a flock of sheep, moving here and there in response to the latest and closest barrier or threat.
Without a thoughtful governance process, performance measurement and improvement are simply out of reach.
From running the local café to running the country, these two driving parameters remain the guardrails of progress.
A year ago Strategy and Governance were on my mind as I wrote a 2023 new year post that used the removal of Dave Rennie as Wallabies coach, and reinstatement of Eddie Jones as the example.
A lot of water has gone under the bridge since. It seems both strategy and governance were not on the agenda of anyone in the administration of Rugby. The Wannabees were bundled out in the preliminary rounds of the World Cup, then Eddie walking away from a five year contract. The lessons I suggested they learn from tennis Canada ignored. Who knows what is now concerning the new management of Rugby. Whatever it is, there seems to be scant concern at the long term health of the game.
Rugby is in trouble at all levels, in the myriad of ways that a lack of strategy and governance exhibit. Stakeholders shooting off in differing directions, poor competitive performance, the grasping of new shiny things supposed to fix everything, (eg Joseph Suaali) turmoil in leadership ranks, strapped for cash, but long on promises of better times to come, and previously loyal ‘customers’ turning away.
Is this just a failure of strategic intelligence, being able to develop and stick to a challenging long term strategy, an abject failure of governance, or both?
January 1 also sees copyright on a number of major creative works coming to an end. Significant among them is the first cartoon feature that synchronised the sound with the animated visuals. Steamboat Willie, the cartoon that saw the emergence of Mickey Mouse heads the list, with a range of works becoming free of copyright.
The release of Steamboat Willie, while being just 7 minutes long, was one of those seminal moments that led to an explosion of creativity and technical innovation. As it was with the 1991 release of the HTML software that created the www by Tim Berners-Lee, and release of ChatGPT by OpenAI in November 2022, the world crossed an inflection point and nothing would be the same again.
We look back on 2023, and hope that 2024 will be an improvement, coming from what we learnt from the mistakes of 2023.
Sensibly we should ask ourselves a series of questions:
- What did I get right, what did I get wrong, and what were the drivers for those choices?
- What did I miss that I should have seen?
- What did I see that others may not have seen?
- How will I progress personally and professionally in 2024
If you genuinely ask yourself those questions, deeply consider the answers, and act on them, chances are 2024 will be better than 2023.
Happy new year.
Header: Mickey Mouse as depicted in Steamboat Willie in 1928.
