8 human impediments to genuine business renewal.

8 human impediments to genuine business renewal.

Why are these  changes so hard?

Why can they not see that continuing on will be a disaster?

These are two questions that I often ask myself working with businesses in distress, or often just underperforming, and looking for some sort of renewal.

Neither is possible without change, as the old saying goes ‘do what you have always done and you will get what you always got’

Pretty common sense, so why is it so hard?

Over the 40 years of working with businesses that need change, first as one of those at the bottom of the tree wondering why the monkeys at the top could not see it, and for the last 22 as an adviser, I have seen a lot.

The first thing that seems prevalent is that change only happens with a significant catalyst of some sort. Usually it is the person at the top who finally commits to the changes, often someone new, who is prepared to push very hard, and to break the shape of the status quo, and reshape a new one.

Then they have to address the very human emotions that combined created the situation in the first place.

Uncertainty. Human beings hate uncertainty, it is usually more corrosive and more damaging than staying in a known state of misery. Collectively, we will do almost anything to feel safe and secure by removing uncertainty.

Saying ‘No’ is easier. Following on from the avoidance of uncertainty, often agreeing to something new or even slightly different enables some level of uncertainty, so the easiest thing is to just say ‘No’. This is why the first sale is always the hardest, you have to get over that psychological predisposition to stay with what is known and understood. As the other  old saying goes, ‘nobody ever got fired for buying IBM’

Loss of control. We like to feel we are in control, even if it is just our immediate environment, and the prospect of losing any of that control is painful. In a world where things are changing around us at apparent logarithmic speed, this loss of control of personal space can be alarming.

Loss of face. Losing face in some cultures is a horrendous possibility to face. Even in those cultures where it does not matter so much, we all want to be liked, to be respected, and by conceding change is necessary, conceding we may have even just condoned sub optimal  practises carries personal risk.

Competence.   Again, conceding that what has gone before is not good enough calls into question the competence of those who allowed it to continue, and in some cases, created the circumstances in the first place, and very few of us are happy to be labelled incompetent.

Change is hard work. Hard work is not just keeping your head down for an extended period, it is also the work of being prepared to suffer the stress of change. Much easier to avoid it, particularly as in most situations where change is necessary, everyone is already working hard, even if it is to fight all the stupid fires, so there is no time left to fix the causes of the fires.

Skeletons reappear. Most of us have a few skeletons buried somewhere, and while all sails on undisturbed, they will remain hidden, but once things get turned over, there is a risk of the ghosts of past stumbles being revealed to a whole new group.

The harsh reality. Sometimes all of the above may be in play, but the biggest link to the status quo is that in a change, people know they will be left behind. In a world of rapid technical changes, this infests many organisations as they set about dealing with the implementation of technology and productivity tools generally.

In my experience, there is no easy way to generate change, and make the new reality stick.

You can either do it progressively, piece by piece which requires leadership, persistence, and a preparedness to communicate, communicate, and communicate some more about the reasons change is necessary.

Alternatively, you can employ the ‘baseball bat method’, and force the change. This is painful, and leaves a lasting scar on not just those who get ‘batted’ but on the survivors as well.  Whichever course you choose, be committed, as the status quo is the most elastic and resilient thing in the known universe, hugely resistant to change and able to recover from a succession of near death experiences.

Change is absolutely inevitable, the very best thing you can do is embrace it.

How many baristas do we need to drive growth?

How many baristas do we need to drive growth?

Coffee shops seem to be the harbinger of our growth patterns, they are popping up everywhere, staffed by baristas (has that become a profession?) with cutting edge hairstyles and tattoos. They all add to the GDP numbers in some tiny way, but are they all we need?

When you look at economic history, sustainable growth always comes from manufacturing, not services. Ok, some comes from agriculture, as we all need to eat, and I guess someone has to grow, transport and roast the coffee, but it pales into insignificance beside the society changing impacts of manufacturing.

When growth happens, it is as a result of manufacturing, and the changes that manufacturing drive.

Look at the culture changing manufacturing innovations of the past: The printing press,  steam engine, and the first wave of automation in the 70’s.

Now we are moving inexorably into the next wave, of  Virtual Reality, Machine learning, advanced robotics, additive manufacturing, and the changes will be profound.

In the past, we have always looked for productivity by building scale. In a manufacturing operation, the more you make of any one item, the longer the runs, the lower the marginal costs.

However, we are now approaching the point where we can create the next big change, shape the major technologies emerging.

Manufacturing robots that can be programmed to do the tasks that are not just the repetitive tasks they currently do, but the robots will start to learn, it is happening now

The next step is not just better smart products, but customised specialist products that combine the abilities of robots and additive manufacturing  to immediately create the products that you need.

The outcomes are that factories will move back closer to markets, they will be smaller more flexible and reduce the time frames of the chain, the products will be much cleaner and better for the environment, and will create growth in areas hard to imagine as I sit here in the middle of 2017

This does not happen by rote, we need to teach the new stuff at the universities, and importantly we need to teach these kids how to think critically and analytically so they have the intellectual tools to adapt, and we need to engage with the changes to ensure they are accommodated within our economies

The new manufacturing revolution will drive manufacturing and  consumption back to the smaller regions. China will become as expensive as Australia in 10 years, and the trade patterns will follow and I suspect  will accelerate regionally with lower barriers and shorter transit times,  rather than being international

We are reaching the point where increasingly challenging manual tasks can be taken by robots. This delivers a potentially huge productivity increase, but it also delivers one of the key questions of the 21st century: what happens to those displaced? Particularly skilled workers in their middle and later lives when retraining might sound nice, but has proven to be a mirage despite  the billions thrown at it.

However, there is a confluence of hardware and software happening at Moore’s law speed. The take-off will vary by sector and by economy, logically it will occur first in high cost developed nations and filter down

This will lead to a productivity surge, further reducing the disparity of costs between economies, leading to a change in the ‘offshoring’ that has occurred. It will no longer  be better to outsource  to China, outsource it to the bloke down the road, where when  necessary you can get our hands around his throat, and/or collaborate in a meaningful way that is very hard across borders, languages and cultures.

So how do you prepare for this?

Understand and be engaged with the developments occurring in your and adjacent domains globally. This is a big call, but putting aside some time for the reading and understanding of the relevant material by authorities and the those on the leading edge can make it a highly productive expenditure of that most valuable resource.

Normally I dislike the term benchmarking, as it leads to copying processes and programs that worked for others, but by the time you have implemented, usually less than 100% effectively, the trend setters have moved on so you are always playing catch up. However, in the case of keeping current, recognising the things the leaders are doing is pretty important, and modelling the best bits that suit  you can be very worthwhile.

Prepare your stakeholders, particularly the employees for the  changes to come. There  is nothing  so unsettling as uncertainty itself so my advice is to communicate extensively, encourage feedback and comment as well as input to the conversations.

Prepare the organisation for the changes that will evolve in the business models and supporting areas such as capital and human capability development.

As a final note, those that will survive do not have the luxury of time. The  average life of enterprises is shortening annually, it is really a commercial Darwinian process, and incumbents who are not willing or able to adapt quickly will go the way of ‘Lonesome George,’ the last of the Pinta island sub species of Galapagos turtles that dies almost on camera with David Attenborough.

 

How to make the hardest sale there is…..Yourself.

How to make the hardest sale there is…..Yourself.

There are too many older people, men and women, but mostly men, who find themselves on the scrapheap somewhere north of 45.

20 years of working life left, and they struggle to find jobs that use their knowledge and experience, and end up mowing lawns or delivering packages.

What a waste of a deep resource, as well as being a social blight on us all.

The jobs these people are looking for no longer exist, they have gone, and are unlikely to come back. Not only do we as a community not value the lessons of experience, we positively discriminate against those with the experience by exclusion.
Subtle, on paper illegal but evident everywhere, exclusion.

We will have to get used to it, as the changes wrought by the industrial revolution and the social disruption colloquialised as ‘Luddites” is coming back at us very, very, fast.

AI, VR,  Augmented VR, and a host of technologies to automate every repetitive task, almost no matter how challenging it may be, is coming at us like a train.  In the coming few years accountants, lawyers, architects, doctors, and many others insulated so far, will all feel the heat of change.

So what should the people displaced by these technologies do?

Learn to sell.

Sales is not just about a product, it is about selling themselves, but the rules are identical.

When someone seeks to buy a product with a significant price tag, they generally have some outcome in mind that they require. The art of selling is to identify that outcome and develop the path that makes you the only option.

Let’s look at it from another angle: how do you sell yourself into a job, which is entirely different to how do you get a job.

Sales is all about the process. Selling yourself is similarly all about the process, from identifying targets, making the introduction, warming up the prospect, to closing the deal. Absolutely no different, except that we are personally involved, failure to get a job means that the kids do not get fed, so the pressure is on, and most buckle and revert to the supplicant mode. Understandable, but absolutely the wrong thing to do. Nobody will hire a supplicant to sell their products, therefore when selling yourself, never be the supplicant.

Know your prospect as well as possible. This is sales 101, why would it be any different selling yourself? Knowing a lot about the businesses you might like to work for is about the most basic piece of information you could have. As a senior manager, I hired a lot of people, and never once did I hire anyone who had not taken the trouble to learn a bit about the business I worked for at  the time. Now, with the net it is even easier to have detailed information about all sorts of things on which to base a few intelligent and engaging questions.

Ask questions. That way you get answers, and can ask the next question, and that is the best way to engage with anyone, ask them about the things they are interested in. Most successful bloke I ever saw with girls was a pretty ordinary looking bloke, smart, but nondescript. He never talked about himself, in fact, did not seem to speak much at all beyond a few questions, as he was flooded by girls who thought he was the bees knees. I only understood this when it was too late for me.

Hustle, at least a bit. Nobody ever failed to be hired for not following up enough. While I dislike the term ‘follow up’ in a generic sense as it is a red sales flag, finding another way to say the same thing, such as ‘just thought I would seek some feedback on our meeting last week’. People want to hire others who will not give up, who will persist, get back up after being knocked over, so why would it be any different when selling yourself.

Know when to walk. As in any sale, there is a point beyond which you will not go. Determine in your own mind what that point is, and be prepared to walk away.  This clearly signals you are other than a supplicant, and does the self-image a lot of good.

Sales collateral. You need sales collateral, even if it is just for credibility. Selling for a business it is the website, product information, deals, and so on. Selling yourself it is your LinkedIn profile, presence on industry platforms and forums, lack of party photos on Facebook, and finally a resume that is short, clearly identifies how the skills you have will solve their problems and be without the usual spelling and grammatical failures. Core to this is the visual elements. We are visual animals,  good photos are  essential.

So, polish up the pitch, do the research, and get out there.

 

Have you ever had a conversation with a ‘chatbot’?

Have you ever had a conversation with a ‘chatbot’?

Not sure?

I do not blame you, they have suddenly become very smart indeed.

A few weeks  ago I had a cause to submit a problem I was having with a web service via their  website. A very helpful bloke came back to me almost immediately with a response, and we interacted as he worked me step by step through the problem, to a solution. Very well done, except the solution did  not work, so I jumped back on and went through it again, with a different, very polite digital helper, referring back to the previous conversation, which he called up, and asked a few slightly different questions, and proposed  a slightly different solution, which did work.

About half way through the second conversation, it occurred to me that I was probably ‘talking’ to a very good ‘chatbot’.

My brain tells me I was talking to a highly developed set of algorithms, my heart tells me it was really two people who really cared about my problem and were committed to helping me fix it.

A  so called ‘chatbot’ is a demonstration of the advances made in machine learning we keep hearing about, and seeing via Apples Siri, and her sisters, and the various messaging apps, translation and transcription services popping up seemingly everywhere.

It is pretty clear that they are rapidly taking over in all sorts of areas, almost by stealth, simply because they are becoming so good, so quickly, and we are welcoming the invasion, if we see it.

I am currently working with a client with a series of significant challenges, one of which I realised while thinking about this post, is perfectly suited to a chatbot. Might take a while, and be way beyond the current scope of their thinking, but watch this space.

 

 

1 very simple question to radically improve performance.

1 very simple question to radically improve performance.

Do not ask who, ask why.

Piles have been written about changing culture as the means to improve performance.

Most of it misses the point.

Learning organisations, teams, mutual obligation, and all the rest, but when it comes down to it, the core is about people wanting to, being able to, and being acknowledged as doing a good, and worthwhile job.

It does not matter if you are the managing director, or the cleaner, both are there for a set of pretty common reasons, and high amongst them is to do a good job.
Nobody, not even the most militant and unreasonable ‘rabble-rouser’ ever went to work to do a bad job.

The task of the organisation is to organise to get the best, most cost efficient, most customer value specific job done and delivered, and in most cases that requires people.

Therefore the task of management, and everybody involved should be focussed on removing the impediments to getting that job done, and having an engaged and responsive work force that gets the job done better than  competitors.

Only then can you be commercially sustainable.

Years ago, (mid eighties) involved in the early production of a new dairy plant which amongst other products made yoghurt, we used to watch the huge waste bins being carted away, several a day, day after day, a seemingly  intractable set of quality problems was costing millions.

Even worse, the office and management staff could see the waste, and lost confidence and heart.

In the midst of the turmoil, I watched one day as bad product was being pumped out of the batching tanks into the system that mixed in the fruit components, and was then sent to the form & fill packaging machine to be packed, to be sent to the waste bin.

When I raced around to get the machine stopped before it was mixed with the fruit, I was told to nick off, the system could not be stopped mid stride, there was  no choice but to knowingly add substantial cost to a poor product that would cost us to throw out.

After some heated exchanges, the whole system was closed down, and I presided over an impromptu meeting I convened almost by force on the factory floor to figure out the cause of the problem. As I was the marketing and sales manager, this was theoretically way outside my formal jurisdiction, but I was the one taking all the customer calls about bad quality and short delivery, and a key KPI was margin, so the bad product was really hurting the formal measures of my performance.

The production manager and supervisory people were seriously pissed, as their KPI’s were all about throughput, nothing about quality, customers or cost.

The meeting was a very unpleasant finger pointing exercise, nobody was to blame, and yet, everyone was to blame, but it was the beginning of an improvement process that led to the plant becoming a world class plant over the following couple of years.

At the core of the improvement was the conversion of the previous procedure of blaming a problem on someone other than yourself, to investigating and fixing the causes of the problems at source.

The tool used extensively was a version of what has become known as ‘5 why’. It replaced what we began to call the failed ‘5 who’ with the genuine investigation and remediation of  the root cause of problems.

The lesson, always Ask why, not who.

 

The 70/25/5 rule of business turnarounds

The 70/25/5 rule of business turnarounds

Most of my time is spent working with medium sized manufacturing businesses that for one reason or another, and usually many reasons combined, find themselves struggling.

The people running these businesses are often reluctant to spend money on consulting. Understandable, not just because it can be expensive in a cash challenged environment, but because they have been burnt before.

They became successful by being good at what they do, the product manufactured, the service delivered, and the admin and ‘soft’ management stuff just took care of itself.

Unfortunately, those days are gone.

In a variation on the Pareto 80/20 rule which holds true in every case, I find myself using what has become the 70/25/5 split in the things that receive attention.

Having done the analysis to determine the 20% of things that will deliver the 80% of the value,  and be able to leverage from the effort to be made, the improvement task is to focus the effort where it will turbo charge the results.

This is where the rule comes into play.

70% of the effort goes into improving the current operations.

20% goes into spreading the current, and now improving operations into related, or adjacent areas.

5% goes into new stuff, experimenting, going right outside the comfort zones.

It also tends to follow that sequence.

Let me give a generic example.

My point of engagement is usually a perceived problem with sales and/or marketing. They need to generate more revenue, and usually quickly, so call in an expert.

Typically I find a tangle of current practises and issues that are sub optimal, that are not generally seen as ‘Sales’ issues. There are poor delivery lead times, inconsistent quality, poorly understood costings, lack of cash management, a reactive and undertrained sales force, poor customer service, and so on. All current activities and processes that require work before much that is ‘sexy’ which is what consultants usually sell, can be implemented. For example implementing a sales training package will not deliver value if the product quality is questionable, or the lead times longer than customer expectations.  It will just be an expensive holiday for the sales staff.

This is the 70%, the early grind of improving the existing  processes and priorities. It is usually a process of planting a nurturing a variety of improvement seeds in all sorts of corners of the business, rather than applying a silver bullet solution, and it does take time.

When the seeds are becoming seedlings, and some improvement is becoming evident, and often it is anecdotal, as the accounting systems typically look behind, rather than in front so the numbers are usually lagging, it may become time to apply the next 20%.

Continuing the Sales analogy, you can now reliably manufacture and deliver products that stand up competitively, you know your margins and capacity constraints, so you can start to focus more effort on increasing your share of wallet, engaging new customers in your priority markets, and entering adjacent markets perhaps with a marginally altered product to better meet the specific needs.

By the time the  20% gathers some momentum, the business is usually becoming prosperous, so can afford to start investing some resources in the really new stuff. The 5% effort spent on new products, the next technological development, and perhaps building scale by merger or acquisition.  It is here that the exciting stuff happens, the next breakthrough in performance, and the payoff for long suffering managers, staff, and shareholders.