Culture: ‘People like us do things like this’

Culture: ‘People like us do things like this’

Aug 1, 2018 | Governance, Leadership

 

So said Seth Godin in a segment of a Q&A session.

Articulating culture is really hard, my go-to definition to date has always been ‘The way we do it around here‘ from Michael Porter.

This articulation ‘People like us do things like this‘ adds to it, by widening the circle to which it applies.

If there is  not a shared set of beliefs and behavioral norms that describe how and why you do the things you do, in any organisation or institution, chances are the outcomes will be suboptimal.

I recommend you watch this, (it is only 7 minutes) and while the answer is to a question from a politician on how to win, it has far wider implications for us all.

Then think about the behaviour you want, and the means by which you can measure progress towards it to build a sustaining culture.

What is the number 1 job of the CEO?

What is the number 1 job of the CEO?

Jul 30, 2018 | Governance, Leadership

 

Most would answer  ‘Financial outcomes‘ , Share price‘ or perhaps ‘Customer satisfaction‘ to that question.

However, when you think about it, they would all be wrong.

Each of the three is an outcome, a result of other things happening, so the right answer should be directed to those things that generate the positive outcome that is being celebrated.

As a group, those things to which the CEO’s attention should be directed are all about an engaged, motivated and well led work force.

Years ago it used to  be called ‘internal marketing’, but the reality is that a term like that just scratched the surface. It is all about the leadership that creates an environment where everyone pulls together (what a terrible cliché) heading in a common direction, that are working creatively and in a focussed and determined manner towards a common purpose. In a word, ‘Culture‘.

When that climate is created, surprise, surprise, the results follow, as night follows day.

Therefore the number 1 job of the CEO should be to create that environment.

There are other extremely important items on every CEO’s agenda, but get the number 1 right, and the rest will be a lot easier. I guess in most circles the characteristic required to generate this environment would be referred to as that hard to define ‘Leadership‘

 

Cartoon credit: Scott Adams stares again with Dilbert 

 

 

The ‘Change Quadrant’

The ‘Change Quadrant’

Jul 27, 2018 | Change, Leadership

‘Death and taxes are the only certainties in life’. Perhaps this used to be true, but no longer, there is now a third certainty:

Change.

Like it or not, it is happening around you right now.

Those charged with the responsibility of running enterprises, managers and Directors, have to be able to lead change, taking all stakeholders with them.

Clearly not all are capable of changing themselves, let alone leading anyone else.

It seems to me that people react to the prospect and fact of change in one of 4 differing ways.

Change avoiders.

There are those who are rooted in the past. Whatever the status quo may be,  it is not as good as it has been in the past, so they are positively motivated to ensure that you do not move further away from this past nirvana they see

Only when there is no choice. These people will not welcome change, they want nothing to be different, and will only change at the end of a pointed stick, and often then only when it is too late, the train has left the station, then they complain about missing it.

Change followers.

There are those who want to be led, they are open to change , as long as somebody else does it for them, and ensures their life is easy. Generally they are happy to tag along and take the benefits of change, and make the contributions to the change so long as they are assisted to it.

Change troublemakers.

This is what they are seen as, but these are often the ones who actually make it happen, the ones who treat the risks and challenges of change as a personal opportunity to make a mark.

Change embracers.

This group seeks change all the time as some sort of stimulant, sometimes as an antidote to everything else that is annoying them in their lives. They are often counter productive as they forget that change does need to be allowed to evolve, and bed itself down, or it fails to take hold.

 

These four groups fall neatly into a quadrant, and you do need elements of all four in a change project,  as when well managed, all have something to offer. In assembling a team to develop and implement change, a careful selection of the ‘change profile’ of all potential members should be considered in order to get the blend that best matches the sorts of outcomes you anticipate, and the nature of  the task. Knowing yourself, which group you fall into is a pretty important first step.

Cartoon credit: Hugh McLeod at gapingvoid.com 

9 ways to ‘stack the deck’ to win that vital tender

9 ways to ‘stack the deck’ to win that vital tender

Jul 25, 2018 | Marketing, Operations, Sales, Uncategorized

 

The better prepared the tender, the better the chance of winning.

Hard to disagree with that statement, but then what makes for a better prepared tender?

While price has a role to play, it is only the deciding factor when all else is equal. Your task as a tenderer is to ensure that all else is not equal, and that your tender represents the best value to the enterprise wanting something  done. Then  you have stacked the deck!

A friend of mine is a senior engineer in a very large building contractor, one of those who is changing the skyline of Sydney on an almost daily basis.

The stress is killing him.

There is the constant need to keep the work flow of projects moving, identifying, preparing and winning tenders, then there is the stress that really kicks in as the construction side of the business tries to extract profit out of a ‘successful’ tender.

Talking to him I was reminded of Albert Einstein’s quote that ‘If I had an hour to fix a life defining problem, I would spend the first fifty minutes defining the problem, the rest is just maths’

When preparing a tender, the filling of the form is the maths. You have to get it right, all questions answered with quality copywriting, no spelling or punctuation errors, professional layout, but still just maths.

The key to winning is not in the maths, that is just table stakes, it is in the manner in which the vision of the contractor is reflected in the documents, the manner in which the tender you submit reflects value in the eyes of the judges. Each judge in the process will have a different definition of ‘Value’. The accountants will focus on cost, the engineers on the durability, regulatory and engineering integrity, the architects in the manner in which the construction reflects the aesthetic and functional innovations contained in their design, and the stakeholders in the return on investment, which is a function of both price to build and price that the construction can generate from buyers and users.

When you spend an extra $1 on the build that generates an extra $2 on the market value, the extra investment is a great one.

So what makes for a winning tender, that is also commercially successful as the job is completed?

Seems to me that the best measure is the degree to which the tenderer comes back and offers some sort of inside running for the next big project because of your performance in the last one or two

Tendering against someone who has that sort of inside running is usually a waste of time and money.

In the case of public infrastructure tenders, where price is a more important factor, you also have to manage the added complication of the nature of the bureaucratic processes and the politics of  the day.

Just ask Acciona, the Spanish firm who contracted to build the Sydney light rail project, which has become another infrastructure debacle. They seem to have taken the arguably inadequate tender docs literally, failed to do their own due diligence, quoted a price and time line, then found themselves in a billion dollar slanging match with the government.

When was the last time you saw a really complicated project RFQ that reflected all the complications that evolved during the construction?

So, how to stack the deck in your favour?

Perhaps a better way of putting it is to answer the question: ‘How can I quote the highest reasonable price, and still win the tender?

Know more about the project than the principal.

Understand what is really being requested. Most tender documents are dry tick the box type things that have nothing of the ‘humanity’ to which most projects are setting out to make a contribution. Focus on the humanity, and vision, not just the yes/no questions.

Understand the ‘vision’ of the principal.

Better yet, shape the vision, so that you can shape the guidelines of the tender docs to best suit your distinctive capabilities

Have relationships with all the ‘functional Buyers’ in the process.

It is always the case that there are a variety of roles played inside a tender process. Engineering, regulatory affairs, financial, architectural, and project management all will have a differing perspective of the end result, and the best route to get there. There is also always someone with the final call, a right of veto. Understanding the nuances of these functional variations, and accommodating them in the manner in which you approach both the documentation and the informal conversations that occur is vital.

Anticipate and leverage ‘Buyers’ personal inclinations.

The ‘buyers’ in the process, in addition to the functional bias, will have personal and emotional views about the best tender. Some will be for you, some against you, some ambivalent, and sometimes there is one prepared to ‘coach’ you on the side when you are a their preferred candidate. Being sensitive to these views, and leveraging them is often of critical importance.

Identify information holes.

No RFQ is ever complete, so identifying the ‘information holes’ not only gives you added credibility, it also gives you the opportunity to get a jump on competitors

Articulate any obvious shortcomings you may have.

Rarely would a tenderer be an absolutely perfect fit for a job, there will always be compromises that can be used as objections by those who may have an alternative favoured candidate. The best way to deal with objections is to raise them yourself, and deal with them. Once dismissed in this way, they generally cease to be valid objections.

Be proud of price.

Remember the old cliché ‘Nobody ever got fired for buying IBM’? It still applies. Human beings are always concerned with their own best interests, which correlates strongly to making as few mistakes as possible. Most are wary of the cheapest price, there is always a catch, either in the fine print, exclusions, or poorer quality, so there is always room to justify a reasonable price that delivers value but not at the rock bottom.

Tenders are competitions.

As in any competitive situation, the more you know about your competition, the better able you are to address their strengths and capitalise on their relative weaknesses. A tender process is not all about you, and your response, it is also about your response relative to the others in the race.

Attention to detail.

It is so obvious that it should not be in this list, but nevertheless, is often overlooked. Spelling and grammatical mistakes abound, as do simple editing errors, inadequately or unanswered questions, and an absence of simple but elegant and memorable graphic design. Make sure you do not repeat these mistakes of your competitors.

 

When you lose, as is inevitable from time to time, make sure you invest the time and effort in understanding why you lost, learn the lessons so the next time you are a step ahead.

Photo: industry.nsw.gov.au

 

 

The four parameters of collaborative success.

The four parameters of collaborative success.

Jul 23, 2018 | Collaboration, Strategy

Collaboration in all sorts of guises, from casual cooperation to formal agreements and even mergers and acquisitions,  is becoming more and more common. Digital tools of communication appear to make it easier, which they should do. However, the tools themselves do not address the basic causes of collaborative failure, a failure to agree on a common outcome that is in the best interests of all parties, and to act on that agreement consistently.

Most collaborative structures fail, sometimes after initial success is unable to be repeated or scaled, even in the face of a compelling logic.

Over the years I have put together a number of alliances, in several industries, with vastly different objectives, from buying simple manufacturing inputs together, to jointly entering export markets with high barriers.

While the nature of  them is different, there are four challenges that simply must be addressed before the collaboration has any hope of survival let alone success.  These four common characteristics of all of them need to be acknowledged and managed.

Profit potential.

The collaboration must be seen by both parties, sometimes all parties where there is more than two (as is often the case in agricultural alliances) as being worth the effort. The potential value must be positive for both the alliances and every individual member of the alliance. This is always a fragile calculation, and the tragedy of the commons always comes into play.

In areas where there is no profit motive, such as between government departments, finding a unifying motive is even harder, and usually in my experience succumbs to politics and ego even faster than  in the private sector.

Complementary skills.

The chances of success are enhanced when the strengths of the parties are complementary, the strengths of one serves to fill in the weaknesses of the other. There is always overlap, sometimes considerable.  At each point of overlap the parties should be asking themselves if that particular area is of significant strategic importance to them, is it a key part of their value proposition and differentiation. Where it is, and there is overlap, trouble follows.

Common view of the outcome.

Differing expectations of the outcome results in stresses that kill off any collaboration. In the absence of a very clear and common view of the outcome of a collaboration, both for the collaborating group and its individual members, it will fail. This is a challenging proposition, as all sorts of human characteristics and frailties become enmeshed in the manner in which they all behave. This common view of the value and outcome of the collaboration must be clear at all levels in all  the collaborating enterprises, and the resources of all focussed at least to some extent on making the collaboration work.

Governance of the collaboration.

Managing an enterprise where there is the opportunity to exercise institutional power is hard enough, it is geometrically harder when the institutional  power is absent, or significantly diminished as it usually is in a collaboration.

Collaborations vary as noted from one-off transactions to  financially, operationally and strategically merged entities, with most residing somewhere between these extremes.  There must be governance rules that define the appropriate behaviour of the parties to  the agreement in all sorts of situations that can be envisaged, as well as those that cannot. These rules must go beyond the scope of applicable regulations, as we are dealing with people. The role of Directors and senior management is to enhance the value of an enterprise, and given there is mountains of data demonstrating that collaborations, particularly at the M&A end of the continuum destroys value, the governance of any form of alliance is critical to its commercial success and longevity.

Normally there are common concerns that can be agreed up front, but there also needs to be agreement on how to manage those situations that are not specifically a part of the initial agreement, but that pop up in the course of operations.

 

It is always best to hammer those out and put them in writing, irrespective of the goodwill that may exist at  the outset, as both people and circumstances change. Tiny molehills that emerge tend to rapidly become mountains unless addressed in a consistent manner, early.

 

There is considerable benefit in working on a ‘code of conduct’ at the formation stage. This can be an agreement over coffee of two sole trader entrepreneurs to a several day workshop of the parties to hammer out the agreements against a pro forma that covers the areas necessary for success.

Such a pro-forma must cover a range of areas, the most important being:

  • Expressions of the specific outcomes each party expects.
  • Definition of what is in, and what is out of the collaboration.
  • Definition of the roles and responsibilities of each of the parties.
  • Creation of joint decision making processes, and the means by which they will be communicated, evolved and managed.
  • The investment requirements of the parties, including non-financial investments, the area where the most challenging disputes can emerge, and how these differing investments will be valued over time.
  • What happens to the assets of the collaboration in the event of a dissolution of the collaboration.
  • A specific list of governance rules and the investments required to maintain them.
  • Specifically set out to build and maintain trust, without which all  the foregoing is a waste of time, and trust is always a function of behaviour, it has to be earned, rarely is it just given..

 

A final point upon which all collaborations hang, and have always hung since the beginning of people living together in some sort of interdependent manner. A collaboration,  or co-operation can only succeed over time when all parties to the agreement see that their best interests are best served by serving the best interests of the group before their own.

Cartoon credit: Scott Adams creating Dilbert, and his wry commentary