Dec 15, 2011 | Collaboration, Management, OE, Social Media
Ronald Coase was first to recognise and articulate the economic relationship between individuals and the co-coordinating structures necessary to organise the work of individuals, coining the term “Transaction costs” in his 1937 essay “The nature of the firm”
Coase in his original paper set up the theoretical framework for the huge cost reductions now possible, enabled by the tools of the web 2.0, which are gathering momentum at a huge rate.
What he did not spend too much time thinking about, because it was not relevant at the time, were the costs imposed by a redundant status quo. Cultures of organisations often require that costs to be absorbed simply because the operating environment has not evolved sufficiently to allow the collaboration tools now available to be used to their potential, leaving co-ordinating overheads to do the work now possible with a mouse, and a bit of nouse.
The possible competitive advantage to organisations, particularly ones with widespread operations is huge, as most of the competition will have trouble making the leap.
Let them pay the cost of yesterday, you have the opportunity to grab the future in recognising the power of the new collaboration tools.
Dec 14, 2011 | Management, Personal Rant
Busy, busy, busy, everyone is too busy to do anything important.
We have had a reshuffle of the federal cabinet, busy people, dedicating limited time to gay marriage and other such important matters, a client of mine is so busy some the basic management stuff simply does not get done, and most large organisations I see are so busy reviewing and planning that there is little time left for doing.
Three simple rules to get more done:
- Keep it simple
- Be prepared to fail sometimes
- Have a go.
In a lovely juxtaposition last night, there was a rerun on one of the digital channels of the “Yes Minister” episode dealing with a rumoured reshuffle, and Minister Hacker reviewing his options. Very close to the current bone.
Stop being busy, and to borrow the phrase, “just do it”
Dec 12, 2011 | Innovation, Marketing, Strategy
From bricks and mortar, to the web, and now to mobile apps. What is next for retailing?
There was a blue last week between the current and previous MD of David Jones, about who wore the blame for DJ’s being slow into e-selling, billionaire Gerry Harvey is often bitching about the unfair competition from e-tailers, and Australian post is gearing up to deliver parcels, as their snail-mail service is on its deathbed, certainly unable to support the infrastructure built for another age. Now the just released Productivity Commission report on retailing has recommended that the threshold for the application of GST on imported parcels drop from the current $1000, as soon as it is cost effective to do so.
It seems to me that there is a resurgence of alternative retail, new business models that leverage the changing environment, Harris Farm, Aussie Farmers direct, Kogan, and many others. By looking backwards to set the regulatory framework, we run the risk of compromising the emerging foundations of the future, and stamping on the wrong hat.
Dec 9, 2011 | Strategy
A variation on the classic Boston Consulting model of product portfolio management the classic 2 X 2 matrix, dogs, cows, stars, and, and, and, everybody forgets the fourth category. Usually it is depicted with a “?” in the matrix, and records those projects that are attractive, but where there is little competitive skill you can bring to bear.
Make it easy, just cows, dogs, and kids!
You milk your cows,
Lose your dogs, and
Invest in your kids.
Easy.
Dec 8, 2011 | Collaboration, Innovation
The formula for risk analysis of innovation could be written as:
Likelihood of failure X Cost of failure.
Therefore, in a traditional hierarchical organisation, there is an ingrained reluctance to take risks and perhaps fail because of the financial cost, whereas in an open system where there is no apparent cost of failure, the restriction of the usual organisational and transaction costs are largely absent.
This does not reduce the incidence of failure, but it removes the financial costs, leaving the personal incentive to succeed, rather than focusing attention on the financial ones.
It is the personal drive to succeed, to do something useful, that makes lives easier, richer, more fulfilling, which is the source of most really original innovations.
