Jan 24, 2012 | Management, Operations
Budgeting and storytelling are synonyms in many companies I have seen. The budgeting process usually is a source of much angst, optimism, gaming, heavy workload, and often intimidation.
We all bitch about the inflexibility and unreality of the budget setting process, as well as the disruption to operations when they are being negotiated, and for what? Usually a set of numbers based on how well individuals and functions believe they can game the system.
It seems sensible to find a way to make the performance management processes much more responsive to the environment, changing circumstances, competitive initiatives, and innovation opportunities that emerge.
Given budgets are about costs, the costs of doing business, of investing, of risk taking, of offensive Vs defensive action, and resource allocation, it seems a simple set of questions before a cost is incurred would be useful.
Instead of just asking “do we have the budget”?
Ask:
- Why is this action necessary”?
- Will the action achieve the necessary result?
- How is the expenditure adding value?
- Can we effectively execute on time?
Questions like these can drive a continuous priority review process, always a good thing.
Jan 23, 2012 | Change, Management, Operations
Most of us know that if we set out to lose weight, a crash diet usually just works in the short term, what we really need is a change in lifestyle, or at least, some aspects of our lifestyle.
Obvious.
Why then is it that in corporate life we usually take the crash diet course?
There have been lots of headlines over the last few weeks about the probability of job losses in the banking sector, a response to the looming financial difficulties. The financial services sector has been doing very well, record profits despite the problems of a couple of years ago, and have been adding jobs, close to 40,000 over the last decade, and now they need to diet, so “crash” find 10,000 to cut.
Surely the problem is one of an ageing business model, in personal terms, too much junk food, not enough veggies and exercise, so now the management reaction is a commercial crash diet. History suggests there will be a lot of pain, and long term, little or no gain.
Those customers whose business is down the shallow end of the banks customer Pareto, the SME’s who are really the engine of sustainable growth in the economy will now find it harder to borrow. The banks are tightening the screws because of their crash diet, so there will be no-one to understand their SME customers business and consider their funding needs, and requests will be reduced to decision by an algorithm. Both the banks and the SME borrowers will lose under these conditions.
Pretty soon, hopefully, someone will realise the problem cannot be solved with a crash diet, it needs a lifestyle change, and only when that happens will sustainable recovery of commercial fitness be possible.
Jan 20, 2012 | Change, Management, Personal Rant
The Federal Government is regularly blackmailed into providing assistance for the Australian car making industry, hundreds of millions on the basis that the industry is strategically important. The real reason is the political poison that closure of a plant causes, as suddenly lots of voters are unemployed, and the support and component suppliers (and their voting employees) are in trouble.
Kim Carr is just the latest in a long line (a conga line?) of Industry Ministers to go to Detroit, only to find that the captains of the car industry do not really care about a modest market and manufacturing outpost that has no real strategic place in the global supply chain, and therefore is expendable. If Australians want to keep them open, here is the price!
What a difference to the processed food industry.
It employs just as many, probably more, and does have a genuine strategic role, feeding ourselves seems pretty strategic to me, but is more fragmented and therefore unable to point to individual electorates and predict disaster, so we just let it rot.
Hypocrisy, perhaps blind stupidity, of the first order.
Jan 19, 2012 | Change, Social Media, Strategy
If you have not yet caught up with SOPA, the “Stop Online Piracy Act” working its way through the US legislative system, you probably soon will, because if it gets up, the troglodytes in Canberra will pile onto the bandwagon pretty quickly.
The act is a response to the digital piracy enabled by the net, but the probability of unintended consequences is absolute.
It is clear that there are problems, why buy music when you can download it for free? The legacy industries of the C20 whose business is creating content would rather you do not have the right to create and share it yourself, they want to produce second rate crap and charge you for it. You being able to do it threatens their profits.
Better ask iTunes, a C21 business by the way, they seem to have done OK, their 10 billionth song was downloaded in February last year, or the boatloads of new bands who have a profile and market for their music via the net, but not a music company in sight, and the bloggers, who have a means to express themselves without a newspaper, the list goes on.
The push against piracy is understandable, businesses are having their business models trashed, and they want it to all go away, but it won’t, simply because the world has changed and they have not, so they need to move over, or as it is happening, be moved over. Painful to the few, but inevitable.
King Canute found the tide did not stop just because he wanted it to, and had pinned his future on being able to stop it, and I suspect the proponents of SOPA will discover the same thing. Being cynical, I suspect they already know it, but are just trying to buy time at our expense. This TED presentation by Clay Shirky, one of the real thinkers in this space says it better than I can ever hope to do.
Jan 18, 2012 | Leadership, Management, Marketing
In the good old days of mass marketing, you could survive in a marketing role, even a senior one, with a pretty generic set of analytical, project management and people management skills.
That is no more, just as mass marketing is no more.
Markets have globalised and fragmented at the same time, consumer and customer behavior is no longer reasonably predictable across demographics, channels are evolving daily, communication options are now in the thousands, and information on product performance, price, features, availability, and so on, is everywhere.
The key marketing KPI is now curiosity.
Marketing people need to be prepared to go and see, to experiment, be brave, spend time at the coalface with consumers, and generally know far more than they had to in the past.
If I was recruiting to-day, Curiosity would be at the very top of my “must have” list.
