A retrospective on personal values.

A retrospective on personal values.

Nov 15, 2018 | Leadership

Years ago as a young product manager, I made two related mistakes.

Nothing huge, or threatening, just a stupid mistake that would have been avoided by a bit of due diligence, thought, and experience.

All three were missing, but what was there was the overconfidence of youth, an action for the sake of action mindset, a level of intoxication with the first trappings of corporate power, and perhaps a (big) touch of arrogance.

Second mistake I made was to try and dodge when the error was called out.

That second mistake created, in the space of 5 minutes, what has become the bedrock of my personal credo ever since.

  • Always take absolute responsibility when it is yours, or that of your team if you are the leader. We all make mistakes, those who do not are not doing enough, but only a fool makes the same mistake twice.
  • When you make a blue, if you are the first to recognise it, stick your hand up, tell everyone of the error, explain why it happened, and what you have learnt. This can be very uncomfortable, but when you point out your own blues, it leaves those who would hang you with very little rope.
  • When it is necessary to administer an arse-kicking, as it sometimes is, always, always, do it in private. Administering the kick in public adds humiliation to the mix, demeans you, and ensures that the kickee will never respect you again, and if they are any good, will leave quickly.

That incident was now 40 years ago, a lifetime, but I remember it as if it were yesterday, and have diligently lived by the three simple rules for all that time.

The single reason most strategy planning fails

The single reason most strategy planning fails

Nov 12, 2018 | Strategy

We confuse strategic thinking with the execution of an agreed strategy.

They are two entirely different processes, and should not be just lumped together for convenience, which is what most of us do by default.

Thinking the strategy does nothing to execute the strategy.

Effective strategic thinking is an ongoing process, it should always be on the agenda. It is evolutionary, requiring deep consideration, diverse thinking and inputs, creativity, and the ability to see connections and trends missed or ignored by others.

Strategy execution driven by  the deep strategic thinking results in priorities, processes and resource allocation decisions, and timing that can all be managed.

The leadership is in the thinking.

It is not unreasonable while doing the strategy thinking to ask yourself ‘How’, but second guessing the thinking part during execution is a recipe for disaster.

There is however a partial exception. Isn’t there always?

Incorporating new strategic information and insight gained during the execution back into the strategic thinking is essential. Feedback loops provide the opportunity to learn, understand, and adjust, and as such are an essential element of success.

Be very careful you understand which is the cart, which is the horse, and what their differing roles are!

Are you running a zombie business

Are you running a zombie business

Nov 7, 2018 | Management, Strategy

 

Zombies are the fictional ‘living dead’. A zombie business model is one that might still be alive, but may as well be dead, unless there is radical surgery undertaken.

Blockbuster was a zombie model, happily making money while Netflix emerged from its cacoon, to kill it in a few short years.

Blockbuster’s then CEO John Antico recognised the problem and instituted a solution that would probably have saved them,  but fell victim to the entrenched view of the Blockbuster model held by his board. His replacement blew some temporary life into the zombie, but missed the opportunity to rebuild, and shortly after, Blockbuster died a rapid and ugly death.

Many bricks and mortar retailers find themselves in a similar position. They know what they sell,  but have no idea to whom they sell it, and whether or not the price at which they sold maximised their margins. Meanwhile, Amazon knows what they sell, to who, at what price, when, and the details of their location, and a host of demographic and behavioural data gleaned from their big data sets. Who is the zombie in that mix?

I note that this morning Lowes announced the closure of 51 North American stores. Can somebody please ask the former Woolies MD what it was like being in bed with a Zombie!

 

 

How to swim in the profit pool

How to swim in the profit pool

Nov 5, 2018 | Customers, Strategy

 

Every industry is an amalgam of value chains, demographic, behavioural, and geographic segments of customers and suppliers.

Inevitably, some of these segments are more profitable than others for a range of reasons. Therefore it makes sense to understand where the profits in your target value chain are being made currently, and where those profits may move to in the future.

There are two challenges here, the harder is seeing the future, but the second, identifying where the profits are now, should be easier.

Apply the Pareto principal to all the segments in the whole value chain, and you will inevitably see that at each point, Pareto rules.

It therefore follows that your best strategy is to identify the areas where your value proposition can add value to the 20% that deliver 80% of the profit.

The king of this strategy is Apple, who control about 15% of the volume of mobile phones sold, but accrues 85% of the profit available in the market.

Who are the 5% of customers who truly value something only you can offer?

Find them and you will be swimming in the profit pool, with little opposition.

 

When price becomes almost irrelevant.

When price becomes almost irrelevant.

Nov 1, 2018 | Marketing, retail, Sales

Price is just an arbitrary scale for the ‘unquantifiables’ which has only two functions:

  • it is a reflection of the amount someone is prepared to sell something for.
  • It is a relative measure, helping you to make purchase choices by giving you and the seller a constant scale and language to reach an agreed point of exchange.

How often do you choose a restaurant because it is the cheapest?

You might decide to go Italian, or Chinese, then decide which one. You decide on a variety of factors, parking, quality of the food and service, are they licenced, who is it that is going with you, is it a special occasion or just a meal. The conversation in your mind goes on and on, often almost unnoticed.

Why is it then that we tend to make major commercial decisions on price?

Almost every  time I am involved with a client in a commercial purchase decision, one party or another uses price as a major point of choice and often leverage

Why?

Few people buy purely on price, and often you would not want them as a customer anyway, so why let them hammer you down?

Think about the value, what it is that the product or service is delivering, how it solves a problem, how it reflects the image to be projected,  how it fits in with everything else going on.

Price is just a means to come to a point where the value can be exchanged.

Value is what is important, price is just a way of converting value to a common language.

Next time you  are being belted about how high your prices are, agree, they are high,  but they deserve to be because of the value delivered.

Just talk about the value.

Talk persuasively about value, and price will become a result, not a driver of the decision.

The real challenge is to figure out how to do this in a situation where the other party has all the power.  A small supplier selling to one of the Australian supermarket gorillas has little leverage, the definitions of ‘Value’ will never be easily reconciled, so the hard choice is to walk away, and deliver value to  customers outside the supermarket system.

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