Dec 23, 2013 | Change, Management, Operations, Strategy
Amongst all the emotional rhetoric and dubious numbers being visited upon us by various interest groups and pollies after the announcement by GM that they will be folding their tents, there seems to be very little sensible analysis of the whole picture. Comment has all been focussed on the current supply chain, the economic and social impact of its crumbling, and what others should have done in the past to prevent it, and now clammering for compensation.
Compensation for what?
Lets have a look at some of the more common blathering.
- Holden is a national icon. GM is a huge multinational company, with problems facing it appropriate to its scale. Australia is a pimple on its arse, no matter how much we blather about “Holden, the national icon”. Why should we continue to support its operations here? If they are not commercially sustainable on their own merits, experience suggests, it is just a matter of time, and the longer we administer the medicine, the more painful the withdrawal.
- The workers need compensation. Fair enough, there will be pain in many households supported by Holden, and Ford over Christmas. However, compensation for what, where are the lines drawn? These workers have had many years of news that their employers are in the edge, so the announcements should not be a surprise, and now they have 4 years notice, and generous redundancy. There are many thousands of worker that have been displaced over the past 20 years who would have killed for just a month of notice and modest redundancy, let alone the largess heading the way of displaced auto industry workers.
- The supplier businesses need compensation. Similarly, the manufacturers in the supply chain, now to be supplying only Toyota whilst they remain manufacturing here, are facing tough times. Should be no news in any of this for them, so failure to adapt over several strategic horizons should not be an excuse for handouts.
- Employees pay taxes. So, the argument goes, being employed, even by a subsidised industry, owned overseas, is better than having them unemployed and the industry closed. This is the sort of economic and social poop, ignoring the lessons of many past disruptions that even the far left should be embarrassed about.
- The industry is the engineering University of Australia. There is some real truth in this, the capabilities nurtured by the car industry have benefited many other industries. However, as the decline in manufacturing in this country is across the board, not just in the car industries, perhaps we should be considering engineering capabilities in the wider context than just one industry that is clearly at the end of its life as it has been run to date. Australia has several sources of potential international competitiveness, mining engineering and technical mining services, solar engineering are just two. The fist of these we squeezed mercilessly for current income, disregarding the long term opportunities to build sustainable engineering capabilities, the second of which we actively encouraged to go overseas to find financial and technical support. How stupid are we?
- Loss of sovereignty. Perhaps the most spurious of the lot. As it goes, without the car industry we have no ability to defend ourselves, no national pride, no capacity to be Australian. Given that only 20% of the cars sold over the last couple of years have been manufactured here, this argument holds little water.
The solutions for the car industry have been obvious for a while, and although not easy, or without risk are not inconsistent with the commercial choices faced by any firm in an industry facing disruption. A few companies have embraced them. Futuris, a former subsidiary of Elders, and a major suppliers of car seats went offshore several years ago, and are reaping the rewards, and there are others, although way too few, who have moved to accommodate the long term trends in the industry, and have prospered.
Here is where I have problems. We are focussed on the political cycle, short term returns, ideology lacking foundation in the real behaviour of real people, and an expectation that it will be all done for us, by the “government”, forgetting that the government is us, spending our money in ways that suit them, and their political priorities, that have little to do with the long term development of engineering capabilities in the country.
Bit like Canute up to his arse in waves bitching about the tide.
Dec 19, 2013 | Change, Customers, Sales
Had an interesting debate at a conference a short time ago, something that I think makes a big difference, but is not usually considered, at least in my experience. The debate was the merits of pitching Vs what I call “long form selling”
Selling is a process, it takes time, effort, and involves multiple touch-points as a relationship evolves that can lead to a sale. Obviously the process varies depending on many factors, you would not expect to spend much time considering the competing merits of different paper-clips, but power stations are a bit different.
By contrast, a pitch is a yes/no equation. You get one shot, a short time, little opportunity to build rapport and points of empathy with your audience. Make or break.
In some industries pitches are the norm, nobody thinks much beyond the immediacy, they are the all there is. In others, long form selling is the norm.
Often the forms are mixed up.
Being an account executive selling to an Australian supermarket retailer is usually called “selling” but the reality is that it is just a series of pitches, with little opportunity to build a relationship much beyond knowing the other parties name and a few commercial characteristics.
Clearly, the greater the imbalance of power in the conversation, the more likely each interaction will look like a pitch. The task of the seller in that case is to take control of the conversation, and ensure it is a process, with opportunities to revisit and review, not just a once off opportunity to sell.
I know which I prefer, but I also know which focuses the mind.
Dec 18, 2013 | Change, Collaboration, Leadership, Strategy
Years ago I worked in a small management group that was faced with the resurrection of a failed business. Problem was, the parent company was blissfully unaware, as the poor performance was hidden inside the operations and overhead recovery of the much larger parent entity.
When it was broken out as a separate division, I did the first P&L, in those days by hand on a 25 column ledger sheet, (any readers remember those?) and wondered what the hell I had done leaving my comfy corporate marketing job for this pile of smelly, baked-on crap.
Over a period of 6 years, this small group turned the business around. It was profitable, 5 times the size, and strategically well positioned. Then the MD of the parent woke up with a good idea in his hand and re-merged the division back into the larger business in an effort to capture some of the successful competitive DNA we had grown. You know what happened then.
Upon reflection, the core of our success was two things:
- Relentless focus on the things that mattered. We relentlessly identified problems and their root causes, and attacked them as a group, disregarding the superfluous, distracting, and often attractive alternative opportunities to spend our time.
- We worked together. The management group, a pretty standard functional arrangement argued, experimented, and engaged as many people as we could who may have something to contribute. People on the operational floor often had the solutions to problems before we had identified the problem adequately, no information was privileged, apart from salary levels, and every pair of eyeballs, and voice listened to, and encouraged. We just had to trust everyone, and it worked. By having many eyeballs on everything, we always had better outcomes.
I am reminded of all this, some 25 years later, with pride, some nostalgia, and sadness. One of that small group died last week, and many of those involved attended his funeral yesterday, it was a sad but joyful day.
Vale my friend and colleague George McDonald, St Peter better have a solid lock on the VB fridge.
Dec 16, 2013 | Branding, Governance, Management, Strategy
For perhaps the 1,000th time last week I heard the “strategy” question asked. It comes in many forms:
What is your customer strategy?
What is your google strategy?
What is your social media strategy? and so on.
All are valid questions, but the implication is that there is a different strategy for every bloody thing that is faced by a business, which to my mind is a degradation, perhaps commoditisation of the meaning of the word as it should (in my view) be practised. This type of usage is about the implementation of strategy, the manner in which you go about achieving the strategic outcomes desired, not about the formulation of the drivers of performance over the long term.
Equally, having an annual “strategic workshop” that sets strategy for the year is a nonsense, well, at best a budgeting session by another name.
“Strategy” is at once simpler, and more complicated than that, and comes down to five really challenging questions that must be lived, every day, by all in the enterprise. They are not the subject of some crappy off-site gab-fest in the slow sales period of the year if you are serious.
- What is the business we are in? (the old are we selling drills, or 20mm holes question, probably the most undervalued, and original marketing question)
- What does the enterprise do to add value?
- What are the behavioural drivers of the primary customers we are seeking to service
- What is our value proposition to these customers and potential customers?
- What capabilities are crucial, now and into the future, and how do we develop them to be differentiated?
When was the last time you seriously asked yourself any of these?
Dec 11, 2013 | Branding, Change, Collaboration, Leadership, Marketing
In some circumstances, “collective clarity” may be a synonym for alignment, but in others it is an entirely different beast.
Currently I am involved in a project that aims to bring together a small group of specialist growers and retailers into a collaborative framework that delivers fresh Sydney basin produce to consumers, and contributes to the building of a brand. “Sydney Harvest“, if successful in pilot, offers the opportunity for commercial sustainability to both Sydney basin farmers and specialist retailers. In the process of developing this project, which seeks to re-engineer the supply chain in response to the economy wide trends that are placing huge pressure on the viability of agriculture in urban proximity, the differences have become stark.
Alignment is typically sought inside a commercial entity, all employees, and stakeholders having a clear understanding of the enterprises direction, priorities, and resources availabilities so each can see the bigger picture, beyond just their area of operation, and act accordingly.
Collective clarity, by contrast, is a term I have started to use to describe the necessity of having a common view of the end point of a collaborative project amongst all collaborators, as well as of the key project collaborative points along the way. This is external to any of the individual enterprises.
By its nature, a collaboration is not subject to the same management thinking that prevails in commercial enterprises, as collaborators are all independent, and sometimes competitive businesses. It therefore requires that they all recognize that their individual best interests are best served by serving the best interests of the collaboration, a big ask.
This Collective clarity is required amongst collaborators for a successful collaboration, alignment as commonly articulated as being internal, is not.
Each individual business will still be managed independently, in their own way. The processes that impact on the collective operations will usually be only a small part of the overall, and so will often require a different perspective, and explicit management, and leadership to be effective.
I would welcome feedback on this idea, as I have not seen it articulated before.
