Mar 23, 2012 | Management, Personal Rant
Not the latest desperate revenue raising measure from a proliferate government, but the cost to stakeholders of the multiple levels of management that infest most large organisations, but which add no direct value.
Management manages, it manages those underneath them, successive levels of filtering, shaping, compromising, and dissembling of information between the coal face and the top.
I recently completed an assignment for a large organisation and realised early on that the job was not to consider the problem presented in a new light, to apply a new set of eyes and experiences to it, but to present to senior management a set of ideas that had in the past not got through the filtering process, and this assignment was a last ditch effort by a committed middle management to question the status quo.
This may be a legitimate management tactic, a way to progress an idea, but it is hugely wasteful. In this case, the conclusion was obvious to all but those who finally allocated the resources, and who owed their exalted positions to the continuance of the status quo. It was a redistribution of resources from shareholders to a bloated senior management without an original idea in 20 years, and to me, a grateful consultant.
Such redistributions in the hands of governments are called a “Tax”, why should it be any different in business?.
Mar 22, 2012 | Communication
In a recent negotiation, a good faith, and non confrontational negotiation conducted in English between one of my clients and a prospective investor from East Asia who spoke virtually fluent but non colloquial English, we suffered from a misunderstanding emerging from differing cultural interpretations of the same words.
We discovered, again, that communication is only completed when the intention of the speaker is clear and unambiguous to the receiver of the words. It is very easy to assume an understanding of the meaning of a word or phrase, simply because they register.
Mar 21, 2012 | Change, Leadership, Strategy
Marketing is all about defining the problem we want to solve, poor definition leads to poor analysis and solution implementation. In the climate “debate” to give it more credit that it deserves, we have absolutely failed to include the capital value of the natural assets we currently have, considering only of the value of the current products that are made.
The whole debate about the need for change in the economy in response to climate change is about the costs that will be imposed as a result of those measures.
The classic narrow minded management mistake of believing the future will be an extrapolation of the past has driven the debate.
The “carbon tax” label has ensured that there is little else considered in the pubs, and around the BBQ’s that determine the public mood, and is a really poor piece of marketing by all concerned, except perhaps the opposition who are just there “to oppose” with no responsibility to be responsible.
In the past I have expressed the view that putting a price on carbon is the most easily managed form of insurance against adverse impacts of climate change should it be a reality. That still seems to be the case to me, even though the bumbling in Canberra ensures compromises that emasculate the cost/benefit, and the public mind is now firmly in opposition to imposition of a carbon price.
However, there is another dimension.
Just ask yourself what is the current value of discoveries that will emerge from natural compounds in the future , all of which come from the forests, swamps, sea, and estuaries around us. What is the value of retaining the natural capital that produces oxygen and water?
Because we have not really considered these things, and because we just assume they will continue to be essentially free as they have been to date, it would be a mistake to believe the past will just continue when we are busily changing everything else.
As a part of the debate, we should spend time considering the value of the natural capital we have, assigning monetary value to the olive tree plantations, as well as the olives they produce, simply because they have values beyond the olives, they produce wood, oxygen, habitat, and even a place to have a picnic. This can get pretty complicated, but the data sets are emerging that enable accurate mapping and assignment of values.
ARies or “Artificial intelligence for Ecosystem Services” is an organisation setting out to develop the methodology of assigning values to natural capital, we would do well to try and redefine the debate from the equivalent of a schoolyard brawl to one that uses our innate capacity to be creative and extraordinarily adaptable when we dismiss the power of current vested interest.
Mar 20, 2012 | Change, Innovation, Strategy
On March 14, IPART, the NSW Utility regulator made public a decision that put a price of 6-8 cents for energy exported to the grid, compared to the current cost of 30-44 cents for any power consumed from the grid.
The argument is in two parts, if I can put a complex report into a few dot points:
- The distribution infrastructure, poles & wires make up over 50% of the costs of electricity, and
- The times of peak demand do not coincide with times of strong sunlight, and therefore the power imported to the grid is of less value.
It seems to me that vested interests have got hold of the argument.
If it was truly that we were seeking to reduce our reliance on coal fired power stations, the ones the pollies tell us are better in private hands so the capital requirements are not a drain on the public purse, would it not be sensible to do two simple things:
- Use tariffs to shift the time of peak usage, (This assumes that households are the drivers of peak demand, which seems questionable to me, industry is a much larger user of power than households) this simply means people put their dishwashers on before they go to bed, not as they finish the meal, and ditto for dryers.
- Encourage the “crowdsourcing” of power, which takes the pressure off the network systems. The march of technology seems to imply that in a very short time we will have cheap batteries that will be able to recharge during daylight, storing power for use later. Put simply, put the generation points next to the consumption points.
We mostly accept that crowdsourcing of all sorts of things is the most efficient way of getting them, from ideas, to finance to goods. So why don’t we do it with power?
Why do we insist on insulating a legacy system that we are moaning is from the last century from the winds of change, when the alternative is obvious, and policy decisions elsewhere seem to indicate that the contrary outcome is in our long term interests. This is not necessarily an argument for subsidy, that is an emotive word, but it is an argument for reducing the responsibility for power generation from the public sector to those using the power, taking advantage of C21 technology.
Mar 19, 2012 | Management, Operations
It takes discipline to concentrate on the process, and to let the outcome take care of itself, recognising that there will be stumbles along the way, but in the long run, the results will come when the process is optimised.
Business is filled with sporting analogies, very useful in making a simple point, so here are two more that make my point.
- Manly rugby league is seemingly currently having a tough time. Defending premiers, their coach left for the enemy under unsettling circumstances, and now their stars are being wooed to go elsewhere, after premierships in 2011, and 2008, and being runners up in 2007. A winning team is slowly being broken up. If you recall, several of their stars left after the 2008 premiership, and again in 2009 when they failed to do much, “what are they going to do for a half-back” the pundits cried 2 years ago. Well up stepped a young bloke to whom they paid relative peanuts, and turned it all around, and now wants to be paid his worth. Their team is packed full of rep players, many of whom have come through the ranks, if not from Manly, then elsewhere, and had their potential realised by the processes at Manly. This does not happen by accident, it is the result of the combined brainpower of the management and coaching staff. They have in place a set of processes, talent selection and management, injury management, players skills, team cohesion on the field and management of the players as individuals. All this comes together on the field, and is extremely hard to replicate in total, it is the bundle of processes that drives the results over time. It remains to be seen if Manly can continue when several of the key brains in building and improving these processes have left, but the playing roster is, for the moment, unchanged.
- Some years ago I watched the British Open on TV with my sage old Dad, (2005 I think) the one Tiger Woods blitzed by 5 shots, and seemed unstoppable. It was noticeable that he often hit off the tee with an iron when the others in his group all used woods, even on some of the long holes. This seemed incongruous to me, but obviously worked. Dad explained it by asking the objective of golf:
“Obviously, to get a low score I responded”
“How do you do that”?
“Get as close to the hole as possible, then sink it” I said, (or something like that)
“Is a long first shot always necessary”?
By then the penny was slowly dropping. Clearly not, the best shot is the one that makes the next one easier, and contributes the most to the outcome, a low score on the hole.
Dad reckoned Woods mentally put himself standing at the flag, and worked out his shots backwards, deciding where each shot should end up to make the next one easier, and more certain, and then selecting the appropriate club. By concentrating on improving the golfing equivalent of the interdependent processes required to get a low score, the low scores did come, more often than his opposition.
Pity he did not apply the same discipline to his life off the course, and I resist the temptation to pun on “score”.
