Sep 20, 2009 | Management, Marketing, Strategy
Modeling scenarios has become a pretty big business, but notice that you often get only the numbers out of the end of the model, rarely the assumptions that drive the outcomes, and rarely a range of options.
This has been brought home again as I read the “strategic plan” completed at great expense on behalf of an industry body that covers a wide range of individual sub industries, each with their own characteristics and issues, albeit with some common drivers such as water availability, labour availability and capital generation.
Consultants at great expense produced a model that churned out numbers supposed to show the way forward, but which common sense says has a lot of dodgy assumptions going in, because what is coming out is unusable by any of the individual enterprises in the industries, or the industry bodies supposed to assist them.
Most commercial models I see set out to prove a point of view, and that point of view usually aligns with some preconceived notion of what the outcome should be. In this above case, the outcome was driven by the consultants need to tell the industry body what they wanted, not necessarily what they needed to know.
Scientific method by contrast works in the opposite way, it sets out to disprove a hypothesis, and by that means, advance our knowledge a bit, as you reconsider the hypotheses on the basis on one more thing you know does not work.
Bit more time consuming, but outcomes that are untainted by an existing perspective.
Numbers are only as good as the assumptions that drive them, so next time you are given an argument backed by numbers, don’t look at the numbers, have someone explain and debate the assumptions that have driven them.
Sep 16, 2009 | Change, Innovation
Aggressive defense of the status quo by powerful firms, or a consortia of firms in some sort of industry lobby body often indicates a fat profit plum ripe for the plucking, or a closed shop that protects inefficiency. Perhaps they are the same thing.
Look at the defense of the record industry against the digital music revolution, the aggressive defense of the pharmacy drug (legal) distribution monopoly, the newspaper distribution monopoly (would you buy a newsagency now with the e-distribution of news taking over?) and the artificially high entry barriers imposed on new entrants to many professional bodies and you will see potential profit in the breaking down of the status quo, which protects someones easy life.
Usually, everyone apart from the defenders benefit when these strong guardians of yesterday are wiped away, as they usually are, with a greater level of pain than would be incurred if there was a sensible and creative discussion about alternative models.
In the end, all the lobbying does is create added waste and pain, and the chance to protect the profits of incumbency by innovation, and evolving the business model to better serve customers is lost in the determination to protect the status quo.
Sep 15, 2009 | Leadership, Management
Two meetings in two days that demonstrated to me one of the key attributes of a leader.
The first, the group shut up until the leader said his piece, making sure everyone in the room knew he had a strongly held view. Everyone rushed to agree with him, despite the fairly obvious contradiction contained in his diatribe.
The following day, another meeting, another client. The boss made sure that everyone had spoken before he did, and he acknowledged where there were differences, and went out of his way to ensure that just because a view was different to his, did not make it any less valid. After a time, a consensus emerged through dialogue, and it was clear that the group would work its tail off individually and collectively to ensure implementation, in contrast the previous day, when any implementation would only have been achieved as a result of aggressive follow up by the CEO.
Real leaders often lead from the rear, the best are usually not the ones who provide what they see as the solution, but those who facilitate arrival at a solution.
Sep 14, 2009 | Uncategorized
Most people spend a lot of time polishing their CV’s, particularly whe they are on the lookout for an alternative role. However, how relevent is the paper CV in the age of the cyber-presence?
The first thing a prospective employer will do is google you, and hopefully the photos from “that” party 5 years ago have disappeared. The second thing they will do, if it is a position of some importance, will be to find someone who knows you, or has interacted with you, perhaps using Linked-in, or one of the other many networks that exist. Alternatively, if there is no record of you, anywhere, that is just as damming for a senior role carrying the responsability to articulate a position for your employer, or a point of view.
Your CV these days is a an ongoing project, something you have to work on continuously, not a once every 3 or 4 years “polish” to the written record of your activities.
By the time a prospective employer considers the paper CV seriously, the fix is in, “articulated” by your presence in the cyber mediums now available. Of course, fewer and fewer positions are now filled at senior levels by an ad, followed by a resume submission process. Now the head-hunters do the research and give you a call towards the end of the process, to determine your level of interest in a role you had not heard about.
Sep 13, 2009 | Change, Innovation, Leadership
Transaction costs occur when you do something, opportunity costs, even harder to measure, occur when you do nothing.
Transaction costs are well hidden inside the activities that take place in your business, and short of introducing activity costing, are usually hard to determine with certainty. However, what is certain in every business I have ever seen is that they can be reduced, usually significantly.
It takes common sense, determination, leadership, and a willingness to break open the status quo to reduce transaction costs, none of which are easy, which is why it can be such a powerful competitive tool, your competitors will find it just as hard, and will often shy away.
Opportunity costs are even harder to measure, and usually it is only with hindsight that any measurement is possible, but then almost nobody wants to point out what could have happened if you had done something differently, and that is exactly why it is such a powerful concept to consider.
Ask yourself: “If we…………., what might happen?” as a part of your planning processes.
