Re-inventing management
This video of Gary Hamel discussing the evolution of management is seriously worth watching.
Blind-flying.
I have been surprised a couple of times recently when I realised that two B2B businesses I was working with really had no idea how their ultimate customers used the products they bought from us. In both cases the products were sold through distributors, whose paranoia about both parallel competition and losing the businesses to a slicker option, because the distribution grass is always greener, prevented them sharing information.
Both the clients concerned were spending significant resources dreaming up new products and technologies, considering process, distribution and marketing options, but were flying blind because they had no idea of what was happening currently in the labs of the final customers .
Asking them how prepared they would be to endorse a pilot putting the flaps on the plane down when he did not know how high they were now brought the obvious response, but where is the difference?
OK, you may not hit the dirt in any way other than commercially doing it in a business, but it is just as stupid.
Blind-flying appears to often be a result of the pressure of the “just do something” attitude, appear busy and stressed, and then boss will leave you alone, but doing anything without understanding the starting point is just plain dumb.
Budget blathering whilst manufacturing dies. June 13 update!
Amidst all the blathering following the federal budget Tuesday night I have not seen one comment, political or otherwise that points out the crisis in manufacturing, particularly food industry related manufacturing.
Sure, lots of puff about how hard it is for exporters, but the terms of trade are better than any time in the last 140 years, so, by implication, how bad can it really be?
The food industry is now dominated by large firms, two retailers have a stranglehold, most of the products you buy are imported, and there is precious little manufacturing done here anymore. Australia is now a net importer of food, yes, a net importer, according to the AFGC State of the nation report 2010, try telling that story around the BBQ on Saturday, “they won’t believe you”
One of my clients, one of the few SME’s who have survived the onslaught of the last 20 years, yesterday missed out on a contract to supply one of the big two retailers on a housebrand contract, missed out does not describe it, his cost of production is just under the landed prices of competitive quotes. If you adjust for the exchange rate of two years ago, he may have won the business, but now!!!
The other side of the terms of trade is how cheaply stuff can be imported. OK for electronics, we do not manufacture them, but Food??. We are no longer self sufficient, and if this small bloke goes under, as most of the others have, 15 people in a modest sized country town lose their jobs, and he loses his house, super, and 30 years of effort. When the exchange rate goes back, after China and India slow down, as they will, and new mines in Africa and South America come on stream, it will be too late for him, and us.
But do you hear anything about this?, does anybody care? Judging by the blather, the answer is NO, or perhaps it is just too confronting a problem for the pollies to acknowledge until they get dragged screaming to it. Much easier to blather.
Update: June 11 2013.
Nothing has changed, Simplot anounced closures last week in Bathurst and Denvenport, Rosella went bust a few months ago, and a host of SME’s in the food industry are no more. In the wider economy, the mining investment boom has slowed right down, manufacturing is still in the crapper, and unlikely to find much succour in the $A being just below parity for the first time in several years. The headline example is Ford announcing last week the closure of local manufacturing, which galvanised the pollies to announce lots of “support” for the workforce, luckily heavily unionised, or they would get nothing, like the Fairfax journos shown the door a few months ago without a political peep.
Meanwhile, the Treasurer talks about the strong economy (well it is compared to Portugal) and almost full employment, but the statistical definition of “employed” is nonsence, meaning there is a huge weight of hidden underemployment around, and as a result nobody is spending. Nobody is taking up the NBN, even if they are the lucky few who are strategically located in a politically sensative spot, and may have the opportunity to do so, and the reluctance has nothing to do with asbestos. The speculation today has been all about the liklihood of Gillard still leading the labor party in September, let alone the country. The PM is in QLD, sprouting the “Gonski” Education reforms as the saviour, quoting numbers emerging from the modelling that has been done as the evidence of her committment, and we know how well that worked in several previous initiatives.
Can the labour party stop talking about itself?? We do not want to hear!
It really is Cloud Cuckoo land.
How to “outcompete” Apple and Google.
Pretty big aspiration, to outcompete the two businesses that have consistently demonstrated the power of innovation as the core competitive tool over the past 10 years, and have reaped the rewards by creating and redefining markets and then taking all the gravy. The story of Skype since the company was initially bought by Ebay is enlightening, and shows how it has been done.
Ben Horowitz, a tech entrepreneur and angel investor got into the act by being part of a consortium that bought Skype for just over 2 Billion $18 months ago. They withstood full frontal assaults from both Google and Apple, who both have a habit of winning, and have just announced the on-sale of Skype to Microsoft for 8.5 Billion. Reasonable return.
In Bens blog entry, where he announces the sale, and articulates the short history that netted$ 6.5 billion in the time it takes my local council to consider an application to build a fence, the key to this stunning outcome is in the first sentence in the second last paragraph, where Ben referrs to the quality of the people, and the network effect of existing Skype users as being the key to the success.
The power of an idea whose time has come, coupled with the best of the collaborative and networking tools of the net 2.0, and great customer service.
Marketing transparency
Branding and brand marketing has always been about finding customers for a product, a “build it and they will come” approach. But life, and the world has changed from just 20 years ago.
I remember the day I saw my first fax, an astonishing tool, but I have not used one in 10 years. At that time I worked for a large company, and the “Boss” got anxious if he could not walk down the corridor and talk at (deliberate grammatical error there) anyone he wanted to, at any time, without the risk of anyone either contradicting him, or not doing as they were told.
Now.. That boss is as relevant as a dinosaur, the world of marketing is all about the individual, “find a customer, and build what they want!” It is products for customers, and the tools of the last 20 years have made the middlemen of previous generations, that command and control boss I had, the advertising agencies, promotional consultants, creepy blokes from universities who you just knew could never have sold a box of matches to a freezing man, irrelevant. The difference is the e-tools that have emerged over the last 20 years, transparency, and the flexibility and opportunity they bring is brings is king, although most institutions hate it, as they survive by hiding things.
When everyone can be a publisher of news, books, photos, ideas, the barrier to entry of needing a printing press is gone, all it takes is $600 for a computer and connection, and if you are really skint, go to the local public library and publish for free.
Morgan Spurlock has made his point in several independent films very differently, he now does it again, by selling naming rights to his TED talk, as he says, probably the only time it will happen. Worth a look.