Jun 13, 2013 | Collaboration, Governance, Innovation, Leadership, Strategy
One of the most famous photos ever taken, above, is of the 29 Participants in the 1927 Solvay Physics conference. The astonishing thing is that of the 29, 17 were Nobel prize winners, lauded busy people, so how did they get them all together at the same time?
Relatively easy, as at the time the photo was taken, only 3 had already won the Nobel prize, the other 14 won in the years after the conference, so were mostly unknown outside their research domain. (One of those who had already won was Marie Curie, who is also the only person in the photo to have won the prize twice, in different disciplines)
The point is that assembling this group, the organisers were not looking backwards, they were looking forward, to those who would make, rather than had already made a huge contribution to the topic.
Next time you are considering the personnel to go onto a project team, seeking to define your role into the future, or just operating a day to day activity, exercise the same forethought, and open the opportunity for great things.
Jun 12, 2013 | Change, Customers, Lean, Operations, Sales
The sorts of customers you have play a significant role in defining who you are.
A former client had a customer base that valued the hands on, custom design, and short supply chain they offered on their packaging component items. That group of clients were not buying the high volume, commoditized products, but far smaller volumes for more specialised and bespoke products.
However, promises of large volumes can be seductive, so in the face of squeezed margins and a flat industry, they broadened their product base to include the low margin high volume items required by the large commodity product suppliers.
The equation was changed, no longer did they enjoy an intimate relationship with their largest customers, being engaged in their businesses at a detailed, technical and developmental level, they were just suppliers who could be replaced with product from China or the US.
The result is a flat revenue line over the last 5 years, with fragile margins despite great success in increasing the productivity of their asset base and employees, and a significant lowering of overheads.
It takes guts and vision to turn a customer away, but it often pays.
Jun 10, 2013 | Branding, Customers, Marketing, Small business
Most customers could not give a rats arse about your vision, values, your customer value proposition, and all the other stuff highly paid consultants rant on about (obviously not me).
What they do care about are the little things, the ones that affect them.
I bank with the same bank I have since they were the only ones who would lend me money for a house 35 years ago, and have just not bothered to change, I usually buy the one brand or petrol, not because it makes the car run any better, but because they are around the corner, and the restaurant I go to most is a little suburban French place that does seasonal vegetables in an ever changing vinaigrette as a side. I love it.
I used to always buy my books (yes, I still buy real books) at the same bookshop where one of the staff seemed to be able to read everything that came through the door, and was able to steer me towards stuff I might like with considerable accuracy. Now however, the store owner is cutting costs, staff has been reduced, and the recommendations of the 15 year old casuals are just not up to the mark.
So, before you spend all that money on the marketing consultants with the new bag of clichés, and web enabled tricks, exercise a bit of common sense and consider the small things, why people come to you, why they choose you instead of the place down the road or over the web, how do you deliver value to them, and what keeps them coming back.
It helps to ask, most people are happy to answer honestly, and the simple fact that you care enough to ask is valued.
Jun 6, 2013 | Branding, Demand chains, Innovation, Marketing, Small business
Coles limited engagement in an “anti factory farming” campaign is indicative of the strategic and marketing tightrope the food industry in this country is walking.
On the one hand we have an effective duopoly of FMCG retailing exercising their power to increase their returns to shareholders, and service their customers by both maximising margin and minimising costs. A core part of this strategy is to absorb the proprietary brand margin by aggressively allocating shelf space to housebrand products that are just globally sourced copies of the proprietary Australian products.
On the other hand we have an Australian dollar that has effectively given a 50% price subsidy to the international competitors to the Australian supply chain, at a time when all other domestically sourced input and overhead costs from labour, power, various rates and taxes, freight, and risk costs have all increased substantially. Double whammy!
An added complication is often that the (usually young) buyers in the retailers take the “fast moving” part of the FMCG literally, and fail to recognise the time and investment often required to reflect even a minor change in their product specifications through the supply chain. The consumer end may be fast moving, but when it takes 7 years to mature a fruit tree, and many generations of animals to reflect spec change in the end product, it can be anything but fast moving.
Now Coles have, quite legitimately, moved to build a sort of “animal provenance” into their produce supply chains, as a competitive positioning strategy against Woolworths, increasing the costs of their suppliers, as well as requiring added investment by suppliers for which they need a reasonable chance of a competitive return. This is at the same time they have reduced consumer prices substantially (consumers have been very grateful) in some markets like milk. Whilst Coles, and Woolworths who followed them, may have sacrificed a bit of margin, the supply chain has borne the brunt of it, despite some spin to the contrary.
The small guy has little chance of succeeding against these odds unless he is very smart, and does not have all his eggs in the chain basket, as just competing on the grounds dictated by the chains is a no-win choice.
There are however, strategies that can be deployed to succeed, but they require a re-engineering of the supply chain into a new beast, a Demand Chain that is driven by consumer demand, not supply, and is managed through a chain “community” where information is shared, and is agnostic in some way of the power of the big chains.
Having been a bit gloomy so far, it is however encouraging that the big two retailers are now differentiating themselves competitively, as consumer niches that can be accessed by agile and innovative suppliers. will evolve.
PS. Just after posting, it was announced that Simplot had put its Bathurst and Devenport plants into a wind-down for closure, and McCains had cancelled potato contracts with three big growers. if we needed more evidence of the parlous state of food processing, it just arrived.
Jun 5, 2013 | Innovation, Leadership, Management, Strategy
I was struck by a line in a terrific blog post by Ian Leslie I read that said ” Google can answer almost anything you ask it, but it cannot tell you what to ask”
It is totally counter-intuitive to consider that the power of the web is now narrowing our horizons, and that by succumbing to the lure of the algorithm, we are dismissing the beauty of serendipity, that unexpected discovery, the thing we would never have seen were it not for “right time, right place”. It does not seem to matter if it is a scientific discovery, Fleming recognising that the growth on his slide was killing all the bacteria around it, or just finding a book in a bookstore that is “right” somehow, these thing s cannot happen on Amazon, or in isolation.
The question then becomes how do you create serendipity?
You need to be messy, cross- functional, collaborative, iterative, and work with an open mind, as well as applying discipline to the scientific method of process improvement, practicing what I call Loose-tight , or ambidextrous management.
This ambidexterity is not easy. It takes leadership, an enabling culture, and a deft hand, but the results speak for themselves. Combining the ability to mine the accumulated knowledge of all of us, with the creativity inherent in human nature when it is open-minded and free to make non linear connections will eventually lead you to ask the right questions, and reveal what you do not know.
Once you see the question, serendipity has a chance.
