May 18, 2026 | Uncategorized
Harvard political scientist Graham Allison popularised the term “Thucydides Trap” to describe the danger that arises when a rising power challenges an established one.
The idea comes from the ancient Greek historian Thucydides, who argued that the rise of Athens and the fear it created in Sparta helped make war inevitable.
Allison originally used the concept to examine the rivalry between China and the United States, but it has a broader application. It is really a way of thinking about what happens when a dominant force begins to lose its grip and the challenger starts to look not only stronger, but more confident.
That makes the question worth asking in Australian politics: has the Liberal Party fallen into its own Thucydides Trap?
For most of the post-war era, the Liberals were the dominant force on the Australian centre-right. But over the past 20 years, that dominance has been steadily eroded. Labor has become more competitive and electorally successful, while the conservative space has fractured, with One Nation drawing support from voters who may once have been assumed to sit comfortably within the Liberal orbit.
The 2025 federal election underlined the scale of the problem. The Liberal/National Coalition was reduced to 43 seats, (now 42 post Barnaby’s runner)and the Liberal Party itself held just 18 seats in the House of Representatives. That is not just a bad election result; it is a sign of a party that has lost its old sense of inevitability.
At the same time, One Nation remains a real presence on the right. In the 2025 Senate vote, Pauline Hanson’s One Nation secured 5.67% of first preferences nationally, and last week won their first Reps seat (apart from the turncoat Joyce) by winning the by-election in Farrer with 39.5% of the vote after preferences. That is unlikely to make it a potential government at the next general election, but it does make it a spoiler, a magnet for protest votes, and a significant pressure point on the Liberals’ right flank.
This is where the Thucydides analogy becomes useful.
The Liberal Party is not facing a single clean challenge from Labor. It is dealing with pressure from two directions at once. Labor is the external competitor. One Nation is the insurgent force pulling at the edge of the party’s traditional coalition. That combination makes the Liberal problem look like a structural crisis.
The internal divisions make it worse. The Liberals have been plagued by factional conflict, in NSW and Victoria, and relegated to ‘phone-box’ size in SA and WA. That electoral failure is further amplified by the fragile nature of the coalition, that acts like teenagers on their second date.
In practical terms, this means the party is trying to solve a political problem while fighting itself at the same time. One faction wants to reclaim the centre. Another wants to sharpen the message and move further right. A third is mostly concerned with survival, which is often the most dangerous faction of all, because it mistakes tactical retreat for strategy.
The result is familiar to anyone who has watched a declining institution under stress. The more pressure it feels, the more defensive it becomes. The more defensive it becomes, the more it narrows its appeal. Inevitably, the narrower its appeal becomes, the harder it is to recover the trust of voters who have already started looking elsewhere.
There is also a deeper identity problem. One Nation is not simply another competitor; it is a party that speaks directly to voters frustrated by elites, suspicious of moderation, and impatient with compromise. That puts the Liberals in a bind. If they move too far right, they risk alienating urban moderates and business-oriented voters. If they move back to the centre, they risk losing more ground to the hard right.
That is the political version of the Thucydides trap. The rising challenger forces the established party into a reactive posture, and the fear of losing ground produces increasingly unstable choices. In Thucydidean terms, the rise of the challenger creates anxiety in the incumbent, and that anxiety begins to shape every response.
Of course, the analogy has limits. No political party is Sparta, and no election is the Peloponnesian War. The point is not that the Liberals are doomed, or that history repeats itself in a literal sense. The point is that dominant institutions often struggle most when they lose the confidence that once held their coalition together.
That is where the Liberal Party now seems to be. It is no longer the natural party of government on the centre-right. It is a party trying to decide whether it wants to chase the middle, absorb the right, or somehow do both at once. That is a very hard balancing act when the ground beneath you is shifting.
So, has the Liberal Party fallen into the Thucydides Trap?
Yes.
A once-dominant force has fragmented and risks becoming increasingly irrelevant at a time when we need a competent, cohesive opposition able to put aside partisan nonsense for the benefit of the country.
Header Thucydides: courtesy Wikipedia.
May 12, 2026 | Uncategorized
Price is often the last thing considered, and then only briefly, inconsistently, by the wrong people, and for the wrong reasons. This is a huge mistake many, if not most make.
The pricing architecture you put in place is a foundational driver of strategy implementation. That statement assumes you have a well thought out, documented strategy.
Irrespective of the standard of your strategy, sticker price can be a determining factor in a purchase decision. It may not be the first thing they see when contemplating a purchase, but it is usually the ‘pepper stroke’ in the process.
Failing to consider the strategic implications of both strategic and tactical choices surrounding your price will result in suboptimal outcomes. Price is the single biggest contributor to profitability over which management has complete control.
The fundamental mistake many businesses make is to set prices on a range of parameters that have little to do with how customers assess value. Customers do not care how much a product costs, how you cover your overheads, or how much profit the owners demand, they only care about what it delivers for them.
A customer sees a price and instantly makes a judgement. Most often this judgement is subconscious, automatic and unappreciated, similar to the ‘fight or flight’ response to danger we all understand.
Daniel Kahneman gave us the best starting point in Thinking, Fast and Slow. We do not meet price first as rational calculators. We meet it first as animals with memory, fear, ego, habits, shortcuts, and a deep reluctance to feel foolish.
System 1 reacts first.
System 2 arrives later, when and if it is given a chance.
In a commercial context, the ticket price seen by a potential customer is the beginning of the process of determining if a transaction will occur. That process is the assessment of a range of behavioural drivers of the purchase, followed by a more quantitative assessment that leads to the conversion, or not. In a supermarket, these two elements of the whole process may take place in an instant, or it may be a bit longer as a consumer assesses the value of their regular purchase against that of an alternative on special. In a situation where the purchase is much more expensive, so comes with greater consequences, the process can take months, or longer.
The supposition implicit in a sticker price is that you have built a solid strategy and have made the usually challenging choices surrounding the five elements of the pricing architecture: the strategic priorities, the business model, level of market power, price packaging, and the behavioural drivers you will engage.
May 4, 2026 | Uncategorized
Preamble
Seven years ago when the post following this preamble was first published, it seemed like a comprehensive checklist for marketing success.
The key was ‘leverage’ and it remains the key to success.
However, the tools delivering leverage have expanded exponentially with the emergence of AI. The AI tools exploding into the marketing environment can generate enormous leverage that compounds with use.
The challenge becomes determining which task or process amongst the many every business contains should be the priority. Trying to do more than one thing at a time is usually a recipe for failure. Failure to deploy AI effectively will become a leading indicator of strategic and financial stress as customers exercise their right to go elsewhere.
Increasingly I am seeing business leaders get together to formulate an “AI strategy”.
Do you need a strategy for using the hammer in your toolbox?
The only thing you need to know is how to recognise the difference between a nail and a screw the context of use, and how to position the nail, then hit the nail head square.
AI may be complex, confusing, misunderstood and widely misused, but it is only a tool.
All else remains the same, the principles of marketing success do not evolve anywhere as quickly as the tools that can deliver it.
You are either on the AI bus or headed for oblivion.
Make the choice.
Original post
Imagine you are faced with the task of joining two pieces of wood.
What information are you likely to need before deciding how to go about the task?
How big and important are the pieces? Are they structural weight bearing? Is the joint going to be seen? And so on.
So: you have the information; you can then decide how you go about the joining. Do you nail? Screw? Glue? Combine rebate glue and screw? Countersink the screw? And so on. You have many options, but without the contextual information, you cannot make an informed decision that will give you the best outcome.
Sometimes this is easy, instantaneous, other times it will require more time and research to get the right answer.
Figuring out your marketing programs is no different.
How are you going to allocate your limited resources across all the possibilities that face you?
Marketing has only one purpose, to generate revenue. Sometimes it is revenue today. Sometimes tomorrow, next month, next year, next decade. If you cannot see a connection between the marketing activity and future revenue, stop now!
The challenge is to know enough to ask informed and intelligent questions, and be able to separate the bullshit from the good answers.
This ‘marketing game’ is full of sellers of new shiny toys that are ‘guaranteed’ to be the answer to all your commercial problems, delivering you rivers of cash.
In order to help you separate the bullshit from the reality, there are four tools you can use to do the separation, which will assist you too see the connections to revenue.
They all are interdependent, none by themselves is of great value, and together they are a powerful way of thinking about your business.
The 4 seem simple at first glance, but in reality very complex questions, that in combination will give you the beginnings of an answer. The rest will come with experience and domain knowledge.
- What problem can I solve for a potential customer, or put another way, how do I add value?
- Who is my ideal customer?
- How do I apply maximum marketing leverage?
- How do I make a profit?
When you have the answer to these four questions, you are ready to spend some money.
Not before.
However, once answered, it is never enough to stand still and think the answers tomorrow will be the same as today, and that the answer today is the ideal one. Business is iterative, you learn from doing, experimenting, doing it better next time. It is an evolutionary process, so long as you are careful not to bet the farm on a dud horse. These are all connected to each other, one without the other is of less value, and the impact of answering them all well is not just cumulative, it is compounding.
There is never one right answer, the interdependencies are huge, as are the options, it is all incremental, a process of improvement and no good answer remains the best one forever.
These four factors, and all the lesser things that hang off them, are compounding.
The twist is that they also compound in reverse, so you have to be prepared to try things, but get them off the table quickly when they do not work.
A little detail on the 4 questions.
What problem can I solve?
Unless you can solve a problem for someone why would they buy from you?
Albert Einstein, my senior marketing guru, said, amongst other things, “If I had an hour to solve a life defining problem, I would spend the first 50 minutes defining the problem, the rest is just maths’
So, do your research before you jump in.
The definition of how you solve the problem becomes your value proposition. In other words, how does what you do add value to the lives of those ideal customers?
If you cannot articulate that, you have nothing except price, and nobody wins a price war.
The solutions to problems come from being able to ask the right questions.
Seeing things others do not see, solving problems better than others, and sometimes seeing a potential problem before it is an acknowledged problem, highlighting it, and then solving it.
The classic case is the iPod. It was not the first MP3 player, and arguably it was not the best technically, but it did something no other mP3 player did. It put ‘1000 songs in your pocket’. It articulated the problem that the product solved.
While others all talked about their technical superiority, the stuff the geeks thought was important, Apple just told us what consumer problem they solved.
Who is my ideal customer?
Who is your ideal customer, the one who will not haggle the price, who loves the product you sell, and proselytises for you? Knowing that person in great detail would be marketing and commercial gold.
Like all gold, it is hard to find, subject to all sorts of distractions and false starts, but immensely valuable when discovered, and discovery is usually incremental, rather than a ‘eureka’ moment. This means it is also a demanding challenge.
What is often also forgotten in the effort to define that ideal customer is that every customer also has an ideal supplier, one who meets all their needs, delivering value in excess of the cost to them. It is a two way street, and a relationship only prospers where there is value being delivered to both parties.
Defining your ideal customer is an iterative process, deceptively demanding, as it requires choices about who is not an ideal customer, and therefore excluded from primary consideration. Choices like this are challenging, but necessary, particularly for small and medium businesses which do not have the luxury of a big pot of marketing money, you have to get it right or waste limited resources.
Following is a list of 6 parameters you can use. Not all will be equally applicable in every situation, but it will pay to give each deep consideration.
Who: Is the demographics they may exhibit. Where they live, age, gender, education, job, and all the other quantitative characteristics that are available. These parameters are pretty much all that was easily available in any detail until digital tools came along.
What: are their behaviours. Do they go to the opera or rock concerts, perhaps both, do they travel overseas for holidays, what sort of causes, if any, do they support, are they likely to demonstrate their beliefs publicly, or are they just internal. All the sorts of things that offer a picture of how they think, feel, and behave in all sorts of situations.
Where: will you find them digitally, as well as in the analogue (perhaps real) world, and what means can you use to make a connection. Are they likely to be avid users of Facebook, LinkedIn or other social platforms, are they comfortable buying on line, do they ‘showroom’ digitally then visit the physical retailer, do they get their news from Facebook and Reddit, or more focused news sites, or even, surprise, surprise, newspapers, radio and magazines.
When: will they be ready to buy? Customers are rarely ready to buy when you are ready to sell. Understanding the customer buying cycles, particularly in B2B and a larger purchase is critical.
Why: should they respond to your entreaties, to do whatever it is you are asking of them. What is your value proposition to them? What promise of a new and better tomorrow can you deliver? What can you deliver that is different and more valuable to them than any alternative? If you cannot answer these questions, it will come down to price, and winning a price war is a great way to go broke.
How: will you service the transaction, and the subsequent relationship that may emerge? This is usually down to questions about your business model and the ‘fit’ that has with the customer.
How do I make a profit?
Just as a successful young single male professional might opt for a red sports car, when 10 years later, with a family, kids, soccer practise, he might opt for a brick on wheels, you can have different business models to suit different circumstances and conditions.
Most small and medium businesses with which I have been associated give little if any thought to the business model, but it is of critical importance.
Are you retail, wholesale, franchised, subscription, digital, or some combination? All are different, working in differing ways, to allocate and absorb the costs and benefits that accrue. Being very clear about your business model, and being able to anticipate if a potential customer will fit is in some circumstances, a vital component of making a profit.
How and where do I apply Maximum Marketing Leverage?
Identifying the point at which you can apply Maximum Marketing Leverage (MML), or in other words, get the most productivity from your marketing investment is the point at which the previous three questions intersect.
Answering the three questions well requires a combination of introspection on your business, in combination with exospection, the examination of your business from an external perspective. The point where these two perspectives intersect is the best spot to apply marketing leverage.
Most will be familiar with the SWOT model of business analysis; this is one of many, and perhaps simplest of the many ‘Mental Models’ you can use to do the examination. Porters 5 forces, Balanced Scorecard, BC matrix, Business Model Canvas, and many others are alternatives. All have their pros and cons, but the key point is that you give due consideration to them, as they will identify and clarify your point of MML.
The ‘maths’
All that has gone before, in Albert’s language, is the definition of the problem. Now we get to the maths, the way in which you apply the leverage.
Most small businesses rush straight to the tools of leverage without due consideration of the nature of the problem they want the tools to solve. However, once defined, pick a tool, or most often a combination of tools that best fits your point of leverage and apply them, recognising that there is no formula to give you thee exactly right answer, so you need to experiment to find the best outcomes. The process of experimenting, will also give greater clarity to the 4 questions, which will in turn clarify the point of MML.
The choices you face are multitudinous.
Digital, analogue, which social platform, how much should be spent on Adwords, does Facebook work, how to use the automation tools available, what about email, letterbox drops, and so on, and on, and on. 20 years ago, life was much simpler, there were few choices, but there was also very few of the tools available that enabled the identification of the point of MML, so experimenting was far more costly and risky than it is now, to the point where small businesses had very few options. Now you have plenty, the challenge is to use them in the best possible manner.
However, there are three things you should always remember, and apply.
- Customers and potential customers move through a decision making process every time before they put their hands in their pockets. Sometimes this is almost instantaneous, as it would be in a supermarket doing the weekly shop, much of it is on ‘auto-pilot’. By contrast when buying a new car, house, or even considering a restaurant, the decision is usually much more considered, research is done, options considered, a short list compiled before a decision is make. This process happens in many ways, and can be influenced by the marketer using different tools, and combinations of tools at different times in the process.
- The tools themselves are only as good as the message that is delivered. Whether you are writing an ad for the local newspaper or sending a series of emails to your prospect list, you need to be able to write and design a piece of communication that will engage the reader, give them the information they are looking for at that specific time, and lead them to the next point in the purchase process. In other words, in the vernacular, you need to be able to produce a variety of ‘content’
- The one tool that should be in every toolbox is your own website. This is your digital home, the spot you own, from which you can communicate with your ideal customer under your terms. The trick of course is to have a website that accurately reflects the answers to the four questions and directs the tools to the point of MML. Most SME’s recognise the need for a website, and either lack the skills to do it themselves, or get a contractor to do it, usually without reference to the 4 questions. Then you end up with a nice looking but not revenue effective website. It is a vital but challenging tool to get right.
A few final but general points about running a successful SME, that are nevertheless vital but rarely get enough attention.
- Referrals are the best and cheapest form of marketing; it just takes time and effort to get to the point where current customers will refer you to others. Get this right, and many of your marketing problems will be solved, so it makes sense to have a formal referral process in place.
- You must understand your ‘numbers’. The accounts, Cash flow forecasts, revenue, cost and customer analysis and forecasts. The Pareto principal, well known as the 80/20 rule applies in every circumstance. Sometimes it is 90/10, rarely is it 70/30.
- Marketing cannot be left to the last minute, it is absolutely essential you identify your MML before you start spending your limited resources.
- Social media is not free, despite the rumours, it costs not only in time and effort, as well as design costs to be effective, the quid pro quo is that you give over a heap of personal information that the social platforms then use to market to advertisers. There are no silver bullets in the quest for success.
Apr 28, 2026 | Change, Marketing
Steve Jobs told Wired magazine in 1996 that ‘creativity is just connecting things‘. He went on this to observe that ‘ a lot of people in our industry haven’t had very diverse experiences. So, they do not have enough dots to connect, and they end up with very linear solutions’
History has proven him right.
When I look at the practise of marketing as it is currently there is, despite or perhaps partly because of, all the AI tools available a huge hole in the number of dots to connect becomes evident. Most would suggest that the emergence of AI offers an explosion of dots, which is partly true. The problem is all the dots that emerge from the algorithms of AI are linear, while the essence of creativity is connecting dots that have no logical connection.
AI is therefore a source of homogenisation of thought, not of diversity, delivering bland, forgettable pop-ups and boring ‘refreshes’ of previous ineffective campaigns.
So, how do you combat the resulting marketing homogenisation?
Seek out curiosity.
Curious people investigate corners, dark spots, they embrace those with different views and debate them. They are willing to adjust and often change their views when presented with new information, or different perspectives on the current information.
In a homogenising world, curiosity will become the hallmark of people who can add value.
Comfort with discomfort.
We humans seek psychological as well as physical comfort. Evolution has given us strong preference for the usual, predictable, and non-threatening signposts in our lives. In earlier times, the few who felt able to investigate the rustle in the grass to see if it was the wind, or a tiger looking for a feed were unusual. Most reverted automatically to flight, and the safety offered by the small community in the cave. As a result, they never knew if there was a tiger looking for a feed outside the cave or not, and mostly they did not care to find out.
The few that did check out the rustle, knew. Occasionally they were not able to pass on the information, but mostly it was the wind, but they knew. They were comfortable and usually energised by the discomfort of the unknown.
Breadth of interest.
To some this is the same as curiosity, but to my mind it is broader. A person who reads widely across current affairs, history, economics, psychology, feeds the building of the diverse ideas, creates contextual variety, and increases the chances of finding several credible ideas that are inconsistent with each other. This clash of ideas is where the potential for connections in unrelated fields emerges. It is the soul-food of creativity. It feeds the opportunity for two equally true but inconsistent ideas to be held at the same time.
Many workshops I have been involved with make the fundamental error of ensuring little of this diversity. Usually, it is an omission by accident rather than design. However, the value of a workshop that has the objective of surfacing ideas that would otherwise be hidden requires both a catalyst, and minds prepared to take a leap.
Automation and transparency.
Use AI to clear away the obvious, linear additions to the thinking process. It is very good at that, and by cleaning away the linear, uninteresting, and undifferentiated it delivers the cognitive capacity and energy to seek out and examine the non-obvious.
Transparency is the blood brother of automation. When processes are clear, and there is clarity of action and accountability that everyone understands, it acts as a foundation from which you can experiment. Toyota created their production system on the foundation of stable and transparent processes, so that improvement opportunities, even tiny incremental ones, could be seen and tested.
These three strategies can be combined into one word: Education.
Not education in the sense that we have stuff bashed into our heads as kids at school, or the learning of the ‘established rules of the game’ in a profession, but the accumulation of wisdom from experience, both personal and given to us by others.
As B.F. Skinner observed ‘Education is what survives when what has been learned has been forgotten’.
That is when we can connect the apparently unconnected to deliver new value.
