Do’s and don’ts of the seasonal strategic “itch”

 

mossie
Just before Christmas, in an unusually hot and humid period, I was attacked by “mossies” while sleeping. The blighters feasted on my left shoulder, leaving a very itchy area.
So what you ask, and fair enough to wonder at the relevance.
It occurred to me that it was a nice metaphor for the “strategic itch” that seems to occur in many enterprises around this time of year. Someone, usually the CEO, gets a mossie in his ear about strategy, which results in everyone putting in an effort to redo the stuff that was probably done last year, a few updated numbers, some new graphs, and a reaffirmation of some vision and mission statements. All this of course culminating in an off-site 2 day meeting that involves a bad head-ache on the second morning.
The itch is scratched for another year, there are some “decisions” that are incorporated into the budget process, but little of real value has been achieved.
Just as scratching the mossie bites on my shoulder offered short term relief, but had little impact on the time it took for the itch to go away, and indeed ran the risk of causing some longer term problems if infection set in, so does the yearly strategic meeting do little, but potentially causes problems.So, here are a few “do’s and don’ts” that may remove the causes of the itch.
Do:
• Identify and consider the drivers of performance and change in your industry
• Consider how your current capabilities are lined up against these drivers, identify gaps, and agree how to address them.
• Review and consider your responses to the value propositions of your competitors, and consider what you would do to you, if you were them.
• Re-acquaint yourself with your customers, ensure you know why they buy from you and not others, and consider the manner in which you build relationships with them.
• Spend time identifying the “cause and effect” chains in your business, and how you can make them more visible, efficient, manageable, and accountable.
• Do a bit of “what if” scenario planning, the more out of the box the better
• Have some different people, from both inside and outside the enterprise in the process and at the meeting to avoid just continuing status quo thinking.
• Remember that innovation capability is about the only sustainable competitive advantage left to us, so consider how best to build the capability to innovate, without worrying too much about that new product in the pipeline.
• Agree a small set of KPI’s that reflect the most important things you considered, and ensure the processes are in place, or at least agreed to measure and communicate performance against them.
• Make sure everyone in the enterprise understands the priorities, and the underlying logic of the priorities, in other words, achieve alignment throughout the business.
Do not:
• Concentrate on the numbers, these days they are too easily generated and tend to remove the motivation to think.
• Allow status to be a determining factor in the importance given to every individuals contribution to the conversation
• Shy away from difficult, or confronting people or conversations.
• Think that all the answers to tough questions can be arrived at in the meeting.
• Think the job is done when the conversation ends. You get 1/10 for talking, the other 9 for doing.
• Think that this is a one-off, annual event. Strategy planning and review processes should be at the heart of enterprise governance, and are an ongoing challenge, particularly for boards.

Have a good strategy meeting.

The “Santa” brand.

santa is dead
It is Christmas day, my adult children are off doing stuff, my wife is working for the man, so I am left with my thoughts, the prospect of a late, and very big lunch, accompanied by perhaps a few too many sherbets, and this blog.
It seems to me that the basic purpose of Christmas is to provide an opportunity to reaffirm the importance of family and the relationships that exist in our lives. However, we have been hi-jacked by commerce, self interest and marketing at its most venal.
Christmas has become a commercial day, even my Jewish friends get caught up in the frenzy, and I am almost ashamed to admit, I have no Muslim friends with whom I have felt sufficiently comfortable to have a philosophical discussion about Christmas, and the personification, indeed branding of it as” Santa Day”.
So, hug your kids, embrace your friends, smile, and remember that it is us that has allowed Santa to become a brand, so it can also be us that steps above the commerce and get back to the real meaning.
Merry Christmas, and thanks for engaging with my variable musings throughout the 5 years of this blog, I hope to have scratched your brain from time to time.

Some non PC views on Holden

first holden

Amongst all the emotional rhetoric and dubious numbers being visited upon us by various interest groups and pollies after the announcement by GM that they will be folding their tents, there seems to be very little sensible analysis of the whole picture. Comment has all been focussed on the current supply chain, the economic and social impact of its  crumbling, and what others should have done in the past to prevent it, and now clammering for compensation.

Compensation for what?

Lets have a look at some of the more common blathering.

    1. Holden is a national icon.    GM is a huge multinational company, with problems facing it appropriate to  its scale.  Australia is a pimple on its arse, no matter how much we blather about “Holden, the national icon”. Why should we continue to support its operations here? If they are not commercially sustainable on their own merits, experience suggests,  it is just a matter of time, and the longer we administer the medicine,  the more painful the withdrawal.
    2. The workers need compensation. Fair enough, there will be pain in many households supported by Holden, and Ford over Christmas. However, compensation for what, where are the lines drawn? These workers have had many years of news  that their employers are in the edge, so the announcements should not be a surprise, and now they have 4 years notice, and generous redundancy. There  are many thousands of worker that have been displaced over the past 20  years who would have killed for just a month of notice and modest redundancy, let alone the largess heading the way of displaced auto  industry workers.
    3. The supplier businesses need compensation. Similarly, the manufacturers in the supply chain, now to be supplying only Toyota whilst they remain manufacturing here, are facing tough times. Should be no news in any of this for them, so failure to adapt over several strategic horizons should not be an excuse for handouts.
    4. Employees pay taxes. So, the argument goes, being employed, even by a subsidised industry, owned overseas, is better than having them unemployed and the industry closed. This is the sort of economic and social poop, ignoring the lessons of many past disruptions that even the far left should be embarrassed about.
    5. The industry is the engineering University of Australia. There is some real truth in  this, the capabilities nurtured by the car industry have benefited many  other industries. However, as the decline in manufacturing in this country is across the board, not just in the car industries, perhaps we should be considering engineering capabilities in the wider context than just one      industry that is clearly at the end of its life as it has been run to  date. Australia has several sources of potential international      competitiveness, mining engineering and technical mining services, solar engineering are just two. The fist of these  we squeezed mercilessly for current  income, disregarding the long term opportunities to build sustainable  engineering capabilities, the second of which we actively  encouraged to go overseas to find financial and technical support. How stupid are we?
    6. Loss of sovereignty.   Perhaps the most spurious of the lot. As it goes, without the car industry we have no ability to defend ourselves, no national pride, no capacity to be Australian. Given that only 20% of the cars sold over the last couple of years have been manufactured here, this argument holds little water.

The solutions for the car industry  have been obvious for a while, and although not easy, or without risk are not inconsistent with the commercial choices faced by any firm in an industry facing disruption. A few companies have embraced them. Futuris, a former subsidiary of Elders, and a major suppliers of car seats went offshore several years ago, and are reaping the rewards, and there are others, although way too few, who have moved to accommodate the long term trends in the industry, and have prospered.

Here is where  I have problems. We are focussed on the political cycle, short term returns, ideology lacking foundation in the real behaviour of real people, and an expectation that it will be all done for us, by the “government”, forgetting that the government is us, spending our money in ways that suit them, and their political priorities, that have little to do with the long term development of engineering capabilities in the country.

Bit like Canute up to his arse in waves bitching about the tide.

“Pitching” increases the stakes

Image

Had an interesting debate at a conference a short time ago, something that I think makes a big difference, but is not usually considered, at least in my experience. The debate was the merits of pitching Vs what I call “long form selling”

Selling is a process, it takes time, effort, and involves multiple touch-points as a relationship evolves that can lead to a sale. Obviously the process varies depending on many factors, you would not expect to spend much time considering the competing merits of different paper-clips, but power stations are a bit different.

By contrast, a pitch is a yes/no equation. You get one shot, a short time, little opportunity to build rapport and points of empathy with your audience. Make or break.

In some industries pitches are the norm, nobody thinks much beyond the immediacy, they are the all there is. In others, long form selling is the norm.

Often the forms are mixed up.

Being an account executive selling to an Australian supermarket retailer is usually called “selling” but the  reality is that it is just a series of pitches, with little opportunity to build a relationship much beyond knowing the other parties name and a few commercial characteristics.

Clearly, the greater the imbalance of power in the conversation, the more likely each interaction will look like a pitch. The task of the  seller in that case is to take control of the conversation, and ensure it is a process, with opportunities to revisit and review, not just a once off opportunity to sell.

I know which I prefer, but I also know which focuses the mind.

The idea gets better with eyeballs.

eyeballs

Years ago I worked in a small management group that was faced with the resurrection of a failed business. Problem was, the parent company was blissfully unaware, as the poor performance was hidden inside the operations and overhead recovery of the much larger parent entity.

When it was broken out as a separate division, I did the first P&L, in those days by hand on a 25 column ledger sheet,  (any readers remember those?) and wondered what the hell I had done leaving my comfy corporate marketing job for this pile of smelly,  baked-on crap.

Over a period of 6 years, this small group turned the business around. It was profitable, 5 times the size, and strategically well positioned. Then the MD of the parent  woke up with a good idea in his hand and re-merged the division back into the larger business in an effort to capture some of the successful competitive DNA we had grown. You know what happened then.

Upon reflection, the core of our success was two things:

    1. Relentless focus on the things that mattered. We relentlessly identified problems and their root causes, and attacked them as a group, disregarding the superfluous, distracting, and often attractive alternative opportunities to spend our time.
    2. We worked together. The  management group, a pretty standard functional arrangement argued, experimented, and engaged as many people as we could who may have something to contribute.  People on the operational floor often had the solutions to problems before we had identified the problem adequately, no information was privileged, apart from salary levels, and every      pair of eyeballs, and voice listened to, and encouraged. We just had to trust everyone, and it worked. By having many eyeballs on everything, we always had better outcomes.

I am reminded of all this, some 25 years later, with pride, some nostalgia, and sadness. One of that small group died last week, and many of those involved attended his funeral yesterday, it was a sad but joyful day.

Vale my friend and colleague George McDonald, St Peter better have a solid lock on the VB fridge.