Nov 5, 2009 | Demand chains, Leadership, Strategy
Suddenly, post GFC, transparency has become a buzz-word.
Regulators are calling for “transparency” in financial products, shareholders (and regulators supposedly on their behalf) are calling for “transparency” in executive remuneration schemes, and so on.
Those of us who have been building demand chains know that transparency is a fundamental building block, not because it is just a feel good, but because it reduces transaction costs, exposed arbitrage profits, and enables the needs of the end customer to be the driver in the chain.
From the noise coming from newly enthused regulators, you would think they have discovered something new, rather than just catching up with the practices of a small but growing part of the commercial community that has recognised the contribution transparency can make to their economic and competitive sustainability.
Nov 4, 2009 | Management, OE, Operations
It is a truism that if you can’t measure it, you can’t manage it.
Largely those who have practiced measuring and then managing for improvement have done well, Toyota with their TPS have taken over the world auto industry, and 6 Sigma, first embraced by GE has driven huge benefits to many.
However, it can be taken too far, the measurement mania that I have seen taking hold can be counter productive.
Two rules:
Measure only what ,matters
Use the measurement to improve .
Too many measure everything as a routine, but with no improvement strategy, nothing really matters as no improvement takes place, others measure stuff that is irrelevant in the scheme of things because it is easy, leaving unmeasured and unimproved the drivers of value.
Nov 3, 2009 | Management, Marketing
New communication mediums have allowed small groups, and individuals to make a lot of noise, but the volume of noise does not necessarily relate to the logic or accuracy of their position, just to their ability to make noise.
Listen for the validity of a point of view, not the volume with which it is promulgated.
Nov 2, 2009 | Change, Innovation, Leadership, Marketing, Small business
We talk about vision, mission, and all the rest, but at a more fundamental level, evolving a point of view, shared throughout the firm, about the “shape” and trends of the industries we are in, and those of the industries we intersect with, is a really basic thing to do.
Having a point of view about the “green” economy enabled GE to start their “Ecomagination” program before climate change was on the general agenda, it enabled them to disrupt their own light bulb business with the compact flouro, and it drives their current efforts to rebuild their huge medical devices business by developing small, cheap, mobile devices that fulfill a more basic need in developing countries .
All this because Jeff Immelt developed a point of view, and drove it through the business as a catalyst for massive and disruptive innovation.
Have you developed a “point of view” about your industry, and the role your business will take? Few are as influential as GE, able to change the “shape” of their industries by their actions, but it is no less important for small firms to have a point of view, and a plan to deal with the “shaping” influences as they emerge.
Nov 1, 2009 | Change, Innovation, Marketing
The path to free will be a major challeneg for the current century, as the price of stuff follows the marginal cost of producing it down to virtually free.
Music is effectively free off the web, despite the best efforts of the music industry, yet the other parts of the industry are doing well, tours, merchandise, the amount of product is increasing, devices like the iPod are booming, just the sales of the CD’s are tanking.
Software is now largely for free, you can still pay full whack for Windows or Office if you like, but few outside corporate do so, and there are thousands of “apps” emerging for devices that are very cheap, approaching free, and streaming of movies is increasingly happening, although as the penetration of Blue-ray increases, it will slow the “free” uptake a bit as people figure out how to beat the security.
What about games?
They are still $99 from the retailer in the mall, and when a new blockbuster comes out, the retailers are packed with kids buying them, the same kids who would not pay for a new song from their favorite artist. Why are the games not yet for free?? Will it happen?? Inevitably.
Anything that can be digitised will follow the road to (almost) free, the money will be made in the value adding products and services, the way Red Hat Have made a business providing service to free Linux software users, and Apple have made a business out of selling the iPod when the music is essentially free.
However, you will probably still have to pay for your carrots down at the green grocers.
