by strategyaudit | Jan 14, 2021 | Change, Management
It is new year, all those resolutions going to waste!
It seemed a timely spot to suggest how we can change outcomes, as it is those we want to change, we just call them habits reflecting the action.
Let’s pick one of the most common: ‘I will stop smoking’.
The usual outcome is that we fail to stop smoking, despite wanting to, resolving, and trying often. It is expensive, and not good for us, but it is a ‘habit’ that is extremely hard to break.
I know, I successfully stopped smoking, for a day or two, at least monthly for several years. Then I stopped, successfully, no drugs, not hypnotherapy, no doctors’ orders, now almost 40 years ago, when a packet of Dunhill 20 was still well under a dollar a pack.
What I realised so long ago, was that there were triggers that set up the urge to light up. The phone ringing at work, after a meeting with my then boss, having a beer (that could happen any time) and several others. My strategy was to substitute the habit of lighting up with something else, a substitute habit that satisfied and then replaced the craving for a fag.
Once I had figured out the substitute, and ensured the new routine was in place, it was actually pretty easy after the first few days.
The challenge is to find that new routine that can replace the nasty habit, and build it to the point where it effectively substitutes for the habit you want to stop. Obviously, if you want to lose weight, stopping eating chocolate cake by substituting it for ice cream is not going to do you much good.
The reward of the new routine has to be real, and related to the cue.
Part of the reward I gave myself was semantic. Sounds silly, but it helped.
I never said I had given up smoking, which implies a cost of some sort. Instead, I told myself, and others, that I had taken up non-smoking, which implies a reward, and attracted the support of those around me for the short time it was necessary. Quickly, I became one of those boring former smokers who pontificated about how easy it had been to become a non-smoker.
It is a simple psychological process.
Identify the cue, substitute the nasty habit with a ‘reward’, create a new routine that works to the same cue.
The simple cue substitution process works, whatever ingrained behaviour you are trying to change, personally, or in a group in a commercial context.
Don’t be afraid of it, embrace it.
Good luck with that resolution!!
Thanks again to Scott Adams and Dilbert for the header cartoon
by strategyaudit | Jan 11, 2021 | Governance, Management, Strategy
It is January, and looming in many organisations is the annual, calendar driven budgeting exercise.
In more normal times, the strategic planning update would have been done in September or October last year, but that went out the window, along with the comparisons of performance to budget that are usually the basis for an extrapolative budgeting process.
Never has there been a better time to revisit the whole process, as it is clearly no longer fit for purpose.
There are better ways.
Top-down mandated budgets designed to give senior management the appearance of control and foresight have been on the slippery slide for some time. The ‘Bug’ should have been the terminal injection of reality.
Constant and unforecastable crisis does not lend itself to a process that purports to predict the future 18 months to 5 years out.
Given that background, how should management be thinking about the planning process?
My advice is that the process should be one of rolling planning, that accommodates information as it emerges, and rolls it into the action programs, while retaining the necessary strategic consistency and functional alignment.
What constitutes strategic success?
Strategic success is not about the money, profits, or shareholder dividends, although sometimes you might wonder. Strategic success is a function of the choices made, the distribution channels opened, customer lifetime value and share of wallet, the innovation pipeline, and capability development that will enable commercial sustainability. These are all things, amongst many others, that are enabled by the tactical choices being made. While the costs and returns are important considerations in these choices, they are just the simplest but often misleadingly one-dimensional means by which they are measured.
How does this impact the planning process?
Planning is vital, as the absence of a clear destination means any road can be taken. However, the process must be way more agile than has been the norm, while not losing sight of the objective. This requires a clearly articulated and understood strategic framework within which the ongoing tactical decisions can be made. At every point of choice, the question should be asked:
‘Does this choice add to the achievement of the strategy?
Strategic priorities can be broken down into operational and tactical choices across and within functional responsibilities. These choices can then be reviewed and updated regularly as information is received and absorbed.
The ideal outcome is that there is regular communication, and by regular, I mean daily, weekly, monthly, and so on, where information is absorbed into the decision processes and used to adjust on the run. Rolling planning at every level can be ‘rolled up’ (pardon the pun) into the longer-term processes ensuring strategic consistency and alignment.
In effect you are matching the tempo and type of decision making to the level most appropriate for that decision to be taken, with those in whatever ‘front line’ is engaged, taking the responsibility and accountability for the decision.
I refer to it as ‘Nested Planning’.
Each stage builds on the former, becoming increasingly less tactical but more strategic in its nature. The most visible metaphor is the Russian wooden dolls that progressively fit inside each other.
Abandon the immoveable budget that becomes set in stone, and replace it with rolling forecasts that track the progress of the resource allocation choices at every level, towards the strategic outcome agreed.
Header credit: ‘mountaineer’ via Flikr.
by strategyaudit | Jan 4, 2021 | Analytics, Social Media, Strategy
Which StrategyAudit posts gathered attention during 2020?
The StrategyAudit blog, and supporting research is both a personal archive of ideas, that vary from complete to really half-baked, a recitation of the things I see and learn from those I work and interact with, and the lessons that come from those interactions.
Over the course of the year, there were 120 posts published on the StrategyAudit site. It seems like a small return for the effort. Luckily, I did not keep a count of the hours spent thinking, researching, writing, and editing these 120, or I would probably have to counsel myself to do something more useful to my retirement fund with the time.
The 3 most popular posts published this year.
A bit of an unfair advantage accrues to those published earlier in the year. However, the pattern across the decade of this blog has consistently demonstrated that most views of most posts happen over the week or so after publishing. It is the minority that then pick up later and continue to deliver multiple views weekly over a long period.
Reflecting on the new management challenges created by Covid, the April attempt at predicting the impact of Covid came in first. Perhaps understandable, and with the benefit of now 8 months hindsight, I am very pleased with the accuracy of the predictions. That will be the subject, as promised at the time, of a separate post. Second place goes to a June post that looked at what I saw as the 6 critical challenges of remote work, a topic we were all thinking about, and at that time just coming to grips with. Third was a bit of a personal rant, which obviously struck a chord at the time, after that idiot MP Craig Kelly jumped on British morning television in January, telling all and sundry that the fires, then ravaging the east coast of NSW, bore no relationship to the hoax that is climate change.
I am going to stretch the friendship a bit and give a dead cat bounce award to a post that I think had some considerable value as I review it, but that got no traction at all. I set out to describe the benefits that may flow from the Covid crisis, reflecting on the adage that there is a silver lining in every cloud. As with the winner in the category, I feel vindicated that the predictions made have been pretty accurate. Perhaps it was just a lousy headline?
The 3 most popular posts of the year.
This is a hands down to a post published over 6 years ago that describes the business model of supermarkets. It has continued to be the most viewed post every year since it was first published. Coming in second is the perennial runner up published in 2016, describing the 4 dimensions of project planning. Third was a welcome surprise, from early 2018, a marketers explanation of the accounting term Net Present Value. Many of those who run small businesses have a disturbing lack of understanding of even the most basic financial management tools, of which NPV is a common and very useful one. There are several other similar posts on accounting related ‘accounting type’ topics that also contributed significantly to the numbers.
Ideas that got no traction, but that seem valuable.
Some of the ideas I post may be a bit whacky, at least to some. However, it is not my job to reflect the consensus, it is my job to stimulate thought, and create some disturbance to the status quo by throwing in stuff from left field.
This one from 2019 combines two ideas. The first that the demarcation between marketing and sales is artificial nonsense created for the convenience of corporate management, and the second, that the accepted sales funnel is as redundant as a knife in a gunfight. Checklists on just about everything abound on the net. This post from late 2017 summarises a checklist I use when assessing the health of a business, was prompted by a similar idea published in the AICD magazine written by Phil Ruthven, for whom I have a very high regard. In 2013 I stumbled across an article in Fast Company magazine that started to explain the OODA loop, an idea that evolved from the fertile and obsessive mind of US air Force colonel John Boyd. I have since read a biography of Boyd, and spent considerable time reflecting on the competitive implications of the OODA loop, which I think is a seminal idea, highlighted this year by the speed and destructive spread of the Corona virus. Those who have successfully re-oriented themselves to get inside the ‘turning circle’ of their competitors, and the spread of the ‘Bug’, and been able to pivot their businesses in the face of the unexpected, have followed, mostly without knowing, the wisdom of the loop to their collective benefit. This follow up published in October 2020 was, sadly, a very strong contender for the dead cat award for 2020.
Finally, one of my personal favourite posts, viewed only once this year, published in 2016 after the death of Leonard Cohen. It has nothing to do with running a business, but is a deeply personal post, reflecting on a couple of the pivotal events in my life.
I look forward to interacting with you throughout 2021, which is getting harder, and harder. The combined impact of the continuing increasingly intense battle for your attention, and the squeezing of organic access to those who may be interested by the ‘social’ platforms makes life a challenge. (with the number of links in this post, LinkedIn is likely to stick me in solitary and throw away the key) If you find value in my thoughts, subscribe to them directly from the website, and spread the word amongst your networks. I promise not to follow you around when you do.
Have a better 2021 than 2020, perhaps an easy goal for most, and the basis of continuous improvement, finding a way to do a better job every day.
Header cartoon: once again, my thanks to Hugh McLeod at gapingvoid.com for the header
by strategyaudit | Jan 1, 2021 | Governance, rant, Strategy
Well, we made it through the most disruptive year in the last 50. As I reflect, it was the last gasps of the war in Vietnam and Australia’s involvement that even comes close to the disruption of 2020.
However, sitting in the epicentre of the Corona ‘Croydon Cluster’, 2021 looks pretty sad. Unlike a year ago looking forward to 2020 with optimism, despite the fires that had been lingering around, about to break out into the inferno that started 2020 on such a bad footing.
As the year progressed, downwards, we had now forgotten floods right after the fires that destroyed communities and took lives, then the Corona bug caused an economic and social lockdown which continues.
Our PM started the year very badly, hiding in Hawaii, then trying to find a hand to shake in the ashes of Cobargo, but learnt his lesson and did a surprisingly good job of leading into the corona crisis, bringing the state Premiers and unions into a collaborative forum which for a few months looked like having a lasting benefit. Then the urge for political and partisan chicanery took hold across federal and state jurisdictions, and the year ended in a dogfight over proposed IR changes that will be central to the 2021 destruction of any remaining urge to collaborate across party and philosophical lines.
On top of the chicanery, we had the NSW premier, perhaps the (formerly) most respected political leader in the country, first fess up to a relationship with a disgraced former parliamentarian who had clearly used the premier in more ways than one for personal gain at the expense of the taxpayers. Then followed her admission that pork barrelling was a normal part of the political process. While we all knew that is the case, the evidence over a long period is unequivocal, it is just that hearing it said, so explicitly, was shocking.
Then China decided Australia needed a kick up the backside, and progressively closed off their economy to Australian exports, a process still evolving, although apart from iron ore, there seems little left to ban. We represent only a tiny fraction of China’s imports, but they represent almost 40% of our exports, and 27% of our imports. This is a dislocation of our economy that will have severe long-term consequences, and the best we can do is have a new minister with no diplomatic chops at all, blathering about a pivot to India. To be fair, it is not an easy problem to solve, but politicians grandstanding and publicly shooting their mouths off are unlikely to help much.
We have become hooked on Government stimulus spending, what happens when it is turned off? This is uncharted territory as private investment has been booted in the belly, despite the lowest interest rates in my lifetime, and households are deleveraging as fast as possible given the uncertainty.
Stimulus investment has been more about mitigating the negative impact of Corona, than it has been about putting in place the drivers of future growth. This is understandable, and has been commendable, but we must recognise that it is a tactical response to the crisis, not a strategic one with long term outcomes of growth as the objective.
Politically, we have no confidence in the collective leadership to address the problems in creative and constructive ways, but we assume the pollies will make sure they are OK. We simply do not trust them any more, the old adage that if a pollies mouth is open, they must be lying, is sadly more current than ever.
Underlaying all this we had the spectacle of many politicians who for unfathomable reasons continue to have power, resolutely refusing to accept the overwhelming science surrounding climate change for the last 30 years, jump in the ‘believe the science’ bandwagon in relation to the virus. This level of obstinate hypocrisy is dazzling in its depth.
We might hope that the collective ‘We’ have learnt a lot from this year but suspect that we have not. With a federal election coming any time from August this year, strap in for more piles of rhetoric, lies and pork barrelling, laced with sweet smelling perfume trying to hide the stench of the bullshit. That will be piled on top of a now highly partisan media that has replaced fact with opinion and populism, largely controlled by a former Australian octogenarian billionaire living in New York. No independent thinking and reporting there, so we will have to dig harder than ever to see the truth in whatever ‘mainstream’ media feeds us.
As a final note, most people are thinking about how to make 2021 better, they are making resolutions, usually big things, outcomes. Something like ‘I will lose 20kg‘. 99.9% of these resolutions made in the depths of new year celebrations, go out the window by the second or third week of January. Instead, decide to make some small changes that will lead to the outcome. We all know that small changes in behaviour both compound and lead to the opportunity to make bigger changes later, so resolve to make a couple of small, easy to maintain changes to your behaviour that will contribute to achieving the objective. This is basic management, do not focus on the objective without recognising that changes must happen if you are to get a different outcome from that which you are trying to move away from.
Look out and stay safe.
