Jan 3, 2022 | Uncategorized
There are more predictions posts than you can poke a stick at written at this time of the year. This is not one of them to add to the pile.
The following is a review of the forces and trends I see at work that will impact on all businesses in Australia in the coming year, most specifically the small business sector.
So here goes, in no particular order, and use the insights as you see fit.
Technology.
We are in the early stages of a move from bits and bytes to something else that will power the green revolution, medicine, and new materials with currently unimagined characteristics, that will enable all sorts of further innovation. We are seeing early signs that quantum computing is about to blow in, and blow everything else away. It is a bit like the point in 1948 just before the transistor was invented by William Shockley et all in the Bell labs. To that point ‘computers’ had been powered by vacuum tubes that were slow and tended to burn out a lot. Suddenly the transistor led to the development of the integrated circuit that has powered us since.
The rapid development of Covid vaccines is a direct result of technology, and will change the face of medical care. The Pfizer vaccine is the result of decades of perfecting the processes developed with the smallpox vaccine in the mid 1700’s first in the Ottoman empire, then in western Europe via the well-known story of the milkmaids and Edward Jenner. The mRNA Covid vaccine of Moderna is another story. It is a combination of proof of concept originally conceived by Francis Crik , one of the identifiers of DNA in the early 50’s, and CRISPR technology developed by two scientists, Emmanuelle Charpentier and Jennifer Doudna in 2007, for which they shared a Nobel prize in chemistry in 2020. Since the initial breakthrough, gene editing technology has advanced at a compounding rate. It is now at a point where a scientist friend of mine described it a few months ago as ‘almost as routine as editing a document in word.’ This technology will not only offer protection against Covid, but will be extended to any virus and parasitic driven affliction. In a short time, it will deliver the vaccine for killers such as malaria.
Politics.
There will be an election this year, and lots of pork will be promised, but for SME’s who cannot assemble a block vote that will change the outcome in an electorate, there will not be much beyond reassuring words about how well the economy is bouncing back. I do not think it will matter who wins, unless there is a hung parliament, in which case, there might be some sensible debate and actions that will benefit small business.
We desperately need a federal ICAC with teeth. However, it seems unlikely we will get one, even if the current opposition wins government, the version they install will be a vanilla version, rather than the robust body we need. They, like the current incumbents know how much they may lose personally from installing such a body, and to heck with the electors.
Regulation of social platforms.
This is coming, but I suspect not in this coming year. Besides, the major platforms are the biggest bullies in town with huge lobbying resources, and politicians will not want to annoy them. Facebook made the point by closing access for a day, February 17, causing chaos, before acceding to the governments Mandatory bargaining code passed in early 2021. Assuming a government does have a go, chances are it will be another fenced dog, good only for barking. The argument that a platform ‘smart’ enough to direct an ad to a highly specified audience in a geographic location cannot equally train algorithms to tell the difference between a fake account, set up in a post factory in Ukraine, and one owned by a kid in Blacktown is utter nonsense.
Voluntarily, Facebook and Google are retiring third party cookies, trying to build ‘social responsibility’ credentials with regulators. This means you may not be chased around the net quite as much by so called ‘remarketing,’ but given the profitability at stake, of Facebook particularly, it would be naive to believe that the changes will be too aggressive. Some added work will be required by SME’s to productively invest in digital ads.
Digital security.
This will become a major pain in the arse for small business. The big end of town has made the investment in security, and while they are still vulnerable, most SME’s by contrast are an easy target. The crims are very smart, way smarter than almost every small business operator, so it becomes a matter of time before you are targeted. Taking basic measures of security has become an essential cost of being in business, so ignore it at your peril.
Supply chain sovereignty.
Supply chains have been heavily disrupted over the last two years and will not go back to ‘normal’ any time soon. The opportunity for SME’s to step in and deliver quality product and services reliably to a timetable will increase as a result.
If the various governments decided that domestic procurement was a real priority rather than a press release, and took steps to make it so, there would be a substantial and instant increase in business. This new business will not just arrive on the doorstep, small business must invest in marketing to secure it, a skill set missing in most SME’s.
Labour
Finding and keeping skilled labour is a huge problem for most SME’s. In the midst of unemployment, we have pockets of extreme demand that must be met if the economy is to grow. This is not about imported labour doing the menial jobs Aussies frown on, it is the high value technically skilled jobs required for manufacturing and the digital transformation happening around us. The tight market taken as the average will increase rates, increasing pressure to digitise, or go out of business.
Retail’s last mile
The retail ‘last mile’ has been comprehensively disrupted over the last 2 years. While we have been locked up, we also looked increasingly to ‘instant gratification’ in everything from the routine purchase of groceries to major purchases, investments, and entertainment.
The metaphorical ‘last mile’ typically the most expensive part of the logistics chain, as well as being subject to all sorts of dead ends and side paths, is being completely rebuilt by technology and VC investment.
The number of start-ups around the world, but particularly the US that have market valuations in the billions and revenue numbers akin to a kid’s pocket money is enormous. Gorillas, Jokr, Gopuff, Getir, Zapp, and a host of similar all looking to knock the king of logistics, Amazon, off their perch. It is beginning to look like the dot.com boom/bust of 1999 all over again.
Climate change.
Irrespective of individual views, climate change is a scientific reality. Argue if you like about the extent, but the sources are indisputable: humans have screwed the pooch, and are continuing to do so. In the absence of change, our great grandchildren will not enjoy life as we have. Even though we can reasonably expect technology to continue to accelerate and deliver benefits, without a place to live those be benefits will be claytons benefits.
Despite the determined effort by the current government to deny this reality, and double down on fossil fuels, they will continue to look like King Canute keeping the tides at bay. There will be a tsunami of change happening in areas from vehicles to devices that capture and store power, science will not be denied. There will be huge opening for SME’s who identify a niche in the sustainable/renewable energy supply chain, and fill it.
Will the pace of global warming continue, the story of the last couple of years, fires, drought, flood, cyclonic activity, all indicate not just a continuation, but an uptick on the rate. A natural barometer of this is the rate at which coral reefs are bleaching. Numerous studies of the great barrier reef, and others around the world over the last 20 years clearly indicate the warming of the waters.
Space has become a tourist destination. Captain Kirk, alias William Shatner became the oldest person to go into space, courtesy of Jeff Bezos.
Non-Fungible Tokens. NFT’s.
The definition of ‘Fungible’ is that it can be replaced by an identical item, there is absolute interchangeability. Therefore, a Non-Fungible item is irreplaceable, there is no substitute. The token part of ‘NFT’ is the proof of ownership held on a blockchain. NFT’s have created a new way to create value. The essential characteristic of a buy/sell relationship is that the seller has the right to sell, and that the buyer is not just buying the original item, they are also buying the right to resell it. Blockchain, on which NFT’s are stored, and ownership tracked, has created a way to make this determination for the original of a digital product. JP Morgan recently put the current market value at 7 $billion, from nowhere a year ago.
Those who can claim ownership now have a new way to monetise that ownership. Consider the Mona Lisa. There is just one Mona Lisa painting, housed in the Louvre, but there are millions of reproductions, from photos people have taken on their phones to professional reproductions. The original painting is non-fungible, there is only one irreplaceable painting. That great photo you took of your new product prototype before it sold millions, or that sporting moment when your 6-year-old, who ended up playing for Australia scored his first try, may suddenly have value as an NFT. If I was the marketing manager of Soccer worldwide, I would be creating a store of NFT’s of the great stars of soccer in the form of photos and gifs, of their great moments. This is a new asset class that will only grow as we come to grips with it.
The Cloud.
Cloud infrastructure is a race for the dominant position currently held by Amazon, spending massively to retain that position, but being chased by Meta (Facebook) Microsoft, currently in second place, and Alphabet (google). Between these 4, they spent $40 billion in the year to September 2021
What the internet did to music and newspapers is being repeated everywhere else.
TV viewing and advertising has been remarkably resilient in the face of digital ads and streaming, but the advent of net connected smart TV and streaming will kill TV as we knew it quickly. The attraction is the 4 billion ad dollars currently going into live TV in Australia. We are followers, the impetus will come from the US, where the ad pool prize is massive.
Some bets here, Netflix, the current market leader will be taken over by one of Amazon, or Disney, who have multiple revenue streams to pump out content, and Disney has many other brands, like Marvel, 20th century, Pixar, national geographic, and an unparalleled back catalogue. HBO is currently owned by AT&T, so will probably be sold, and then there is the Chinese platforms, Tencent and Baidu, Huge in China and Asia generally, who will be looking towards the US and Europe with acquisitive eyes. It will be interesting.
Many small businesses have migrated to cloud accounting software, and a specialist application or two, without making a real commitment. The pace of development means that you are either on the cloud, leveraging the tools to scale productively, or being left behind. For most SME’s it is a big capability gap, and again, most have been bitten by salespeople making big promises, but delivering little, but it is time to go again. Find a person or firm you are comfortable with, and have them beside you for the journey.
Demography.
The developed world is getting older, and more demanding of governments, while there are increasingly less people to pay for the demands. The currently developing world is on the other end of the continuum, they want what we have, but are lacking the resources to get it, so are migrating, jumping the stages of technical development we older developed economies went through, such as going straight to mobile in Africa, jumping the infrastructure costs of fixed line. Human beings have migrated since the beginning of our evolution. Just because there are now national boundaries in place, that migratory drive will not go away in a flood of nationalism and self-preservation, it is exactly self-preservation that will drive it.
Resource access.
We can live with all sorts of shortages, except those of food, shelter and water. Specifically water, without which, we humans die in a few days depending on temperatures. Beyond those three necessities, we need a whole range of other resources to maintain a standard of living. Those with the access will be the owners of the world in the future.
The huge challenge is how do we allocate our limited financial resources against the various demand for spending? The inclination is to spend it to address the short-term irritations and public demands, tactical stuff, but unfortunately they win elections. It is the long-term stuff we need to really consider, as they are expensive, risky, but important, despite not biting us on the arse today. Broken down is it driven by the simple fact that some have it, and most do not, and the forces to equalise will, over time, play a key role in the shape of the world
The economy.
Who really knows what will happen? Certainly, the politicians do not, and economists can only make a best guess based on what has happened before, and current theories about how the past will impact the future. There are many diabolically difficult decisions to be made on the allocation of shrinking resources against increasing demand, with voter and lobby groups opposed to the changes in the tax regime required to increase the tax base. The fundamental mismatch between the short-term focus of government and the necessity to invest for the long term, with the increased risk profile such long term decisions require will remain an intractable problem in the absence of a sense of common purpose amongst all Australians. Clearly the current political leadership is across the body politic, incapable of meeting this challenge.
Closer to home, inflation will kick along which may prick the housing bubble in Sydney and Melbourne, or not, depending to some extend on the truth to the claims that prices are supported by international tax money seeking refuge in our lax regulatory environment.
The frenetic building activity of the past few years will probably cool off as demand slackens, which might see the cost of trade skills soften. The continued absence of migrant agriculture workers due to Covid will see the cost of produce increase significantly, leading to many smaller farming enterprises to merge to fund automation.
Then, you have the uncertainty of the trading relationship with China feeding into our economy in all sorts of ways over which we have no control at all. It seems unlikely any fences will be mended soon. We are being both taught a tough lesson, and being held up as an example to others, and the collective impact on our economy is substantial, and likely to increase. Currently China imports about 60% of its iron ore from Australia, and 20% from Brazil. Imagine the impact as that equation switches, as it will, as China diversifies its supply away from Australia. They have demonstrated that a bit of domestic pain is irrelevant by squeezing imports of Australian metallurgical coal, switching to supply from elsewhere, and simply using less. The bans imposed on wine, barley, meat, and lobsters will be pocket money by comparison.
Having said all of that, look forward to 2022 with optimism. Australia is still the best place in the world to be despite the challenges.
Header photo credit: The photo is of ‘Black Jack’ crossing the line first in the 2021 Sydney Hobart. I have reproduced this photo accredited to the ABC, but somebody owns the original. It can transfer onto an NFT platform, and traded. Meanwhile, I can reproduce it, but never own it.
Dec 31, 2021 | Leadership, Personal Rant
I had not intended to publish another post until 2021 was behind us after the review a few days ago.
However, the decision of national cabinet yesterday, coupled with today’s Covid numbers changed my mind.
In the back of my memory is an early Monty Python sketch.
Two characters discussing the very disturbing rise in murders, and what should be done. One finally suggests that murder be made legal, end of the problem with murder rates and associated public outrage.
Yesterday our politicians ‘led’ by #scottyfrommarketing decided to change the definitions of what constitutes a ‘Close contact’. While the definitions and consequences have varied across states to date, they are now consistent, and will reduce the number of tests, and therefore the number of cases of Covid reported.
Problem solved?
Not as such.
Perhaps the political problem has been massaged, but Covid has not gone away. The collective memory of Australians will be that once again, politicians have, if not lied, then creatively massaged numbers to make black look a bit more like white.
It is Ok to acknowledge that this pandemic has become endemic, and despite all the science at our disposal, we are stumped, for the moment. That admission however tacitly concedes that people will become sick, and some, particularly the old and in some way vulnerable, will die. Not a good election promise.
The header graph is NSW covid cases to December 29th. The 30th, yesterday was 21,151 and today, the 31st will be added tomorrow, January 1, 2022. Probably not a good beginning to the year.
Yesterday’s 21,151 came from 148,410 swabs, a 14.3% infection rate. This is a number that very recently would have induced political panic, now it is just a number to be massaged.
I wonder what the gagged scientists think of the massaging?
Have a good, and distanced, new years eve celebration.
Dec 29, 2021 | Marketing, Small business, Strategy
At the end of the year, it seems sensible to have a look at the posts that generated the most traffic. Surprisingly, none are posts that have gone up in this most challenging year, not an outcome I anticipated. This demonstrates the long-term value of a blog of this nature. Collecting and curating ideas and perspectives over a long period becomes an investment, certainly for me as the writer, and hopefully for those who choose to follow, or just dip in from time to time.
In order, from the most viewed, the 10 were:
5 key factors to consider when planning your budgeting process. January 2020.
https://wp.me/p5fjXq-2sN
This post was the first of 2020, and did generate some traction early on. However, in the early parts of 2021, when suddenly businesses had to rethink their budgeting processes in the face of Covid it took off. It will no doubt kick along again in the early part of 2022, which is unlikely to be much more predictable than the year just finishing.
3 essential pieces of the supermarket business model. November 2014.
https://wp.me/p5fjXq-1pd
First published way back in 2014, this post has been number one or two in the most read posts every year since. Clearly the elements of the supermarket business model retain an abiding interest. Retail is also the core of my corporate experience, now 25 years behind me. Many of the illustrative stories in these pages come from that time, as the lessons are timeless. The tools have changed, the behavioural foundations remain very consistent. Even amongst the massive switch to online retailing in the past year, the foundations of retailing have remained consistent. The pace has increased geometrically, and the logistics are new, but the basic requirement for success, to add value to the consumer, remains exactly as it was.
The 4 dimensions of project planning. August 2017.
https://wp.me/p5fjXq-1Gz
Every business is a mass of individual and group projects of various types and importance. This post offers a framework to consider when going about the planning processes. Planning is another form of predicting the future, and as we know, that is not a reliable process. However, planning ensures you are better prepared than just relying on being reactive as circumstances change. As Eisenhower noted just before the Normandy landings in 1944 ‘In preparing for battle, I have always found that plans are useless, but planning is indispensable’
The 5 strategic dimensions of price. October 2018.
https://wp.me/p5fjXq-2ba
To my mind, this is one of the more important posts I have written amongst the 2100 over 13 years. How to set and maintain optimum price is a challenging, even confronting task, too often not given the strategic importance it deserves. After all, every added dollar of revenue you can extract from the marketplace falls straight to the bottom line, and it is the one driver of profitability over which management has absolute control. It is one of a number of posts around price that are in the archives.
A marketer’s explanation of Net Present Value. February 2018
https://wp.me/p5fjXq-20v
Net Present Value, or NPV, is an accounting term thrown around with gay abandon by accountants, assuming everyone understands what it means. Over the years, very few marketers I have known had a clear understanding of NPV. Hopefully, this post helped some in those conversations with their accounting peers, trying to get their own back for all the jargon marketers habitually use, by using a bit of their own.
A private note to the chairman. April 2013
https://wp.me/p5fjXq-10x
This one was a surprise. It is an old post from 2013 that paraphrases a conversation I had with the chairman of an organisation on whose board I sat at the time. We had failed to agree for some time over a series of questions that could be characterised as the priority list against which the board should have been making resource allocation decisions for management to execute. At the time I was pretty fired up, and subsequently resigned the role. On rereading the post, I would not resile from any of the items listed, and would offer the same advice were I to be in a similar situation again.
How to wield Occam’s Razor to build robust strategy. June 2016.
https://wp.me/p5fjXq-1Rd
Occam’s Razor seems to have become a bit fashionable recently which is perhaps why this post got a guernsey in the top ten, after languishing with the ‘also-rans’ for 5 years. The advice however is sound, seeking the simplest possible explanation that fits all the facts, no matter how unexpected it may be. In a complex and volatile world, simplicity is one the hardest things to achieve.
Classic Marketing Strategy: Before and After. September 2016.
https://wp.me/p5fjXq-1Il
The title says it all. Marketing is about delivering a value proposition to those who may engage and make a purchase. Showing how the outcome of the purchase delivers a positive outcome has always been, and will always be a powerful way to communicate. I used myself as the example, having just had a couple of ‘headshots’ to replace the one I had been using, which was ‘homemade’. It might be time for an update, although the years and inactivity of Covid have not done me any favours.
Problem solving continuum. June 2010.
https://wp.me/p5fjXq-k3
This post was a very early one, proposing the idea that every problem sits somewhere on a continuum that describes the way in which management goes about finding and executing a solution. At one end workarounds are common, to the other end where difficult problems are subjected to continuous improvement processes. There is much more that could be said, and a number of subsequent posts addressed some of these items, but given the interest, this idea will receive greater consideration in 2022.
The 7 mental models for Successful marketing. June 2017.
https://wp.me/p5fjXq-1Rw
This 10th inclusion reflects on a very personal experience that highlighted to me the simple fact that while the tools of marketing have changed radically over the last decade, the foundations have not changed at all. It is one of the longer posts in the archives, running to almost 3,000 words, and includes an audio version delivered at a small business seminar tagged on the end.
To those who have followed, commented, or just ‘dipped in’ occasionally, I extend my thanks, and hope that you continue to draw some value from my musings.
Have a great 2022, it can only be better than 2021.
Dec 24, 2021 | Change, Governance, Leadership
The PM has made an absolute mess of it, bouncing from one headline to another like a clown on speed. You must give credit for the energy, pity it is expended on trivialities rather than tackling the big questions.
The government has changed tack in the face of the coming election, they cannot any longer claim to be the better fiscal managers of the economy, better husbanding our tax money in the face of the huge deficit, largess to corporations under job keeper who did not need or qualify for it, and the massive pork barrels rolled out over the past few years. $1.9 billion to government seats, while labour held seats received $530 million. The most recent report being a review of 19,000 grants in a ratio grossly favouring government seats published by the SMH. The one I live in, the marginal seat of Reid in Sydney, has received $14.8 million, so the member will be crowing about how effective she has been. To be fair, she does seem to have been a smart and engaged local member with an impressive academic and community engagement resume, as well as a solid foundation of common sense. The neighbouring seat of Grayndler, held by the opposition leader, in at least as needy a place as Reid, received $718,000. Will it be enough to save Reid for the Liberal party? Who knows, but amongst my peers it is the solid view that a vote for an effective and moderate local member is also a vote for an ineffective, narrow minded, spin driven and vindictive Prime Minister. If this is the state of governance in an area with publicly available information, heaven knows the mess that those areas, increasingly protected from public view, is in.
In March the Royal Commission into Aged care dropped onto the table, detailing a chronically under-governed industry making the privatised providers a fortune at the expense of the most vulnerable amongst us. It is a wrangle between the feds who regulate aged care, and the States who fund it, nobody carries responsibility. On top of the deaths that occurred in Victoria from Covid mismanagement, it is surprising that this has been wiped off public awareness. It is an ongoing disgrace. Perhaps it is the result of the monumental cock-up the feds made of the vaccine rollout in the early part of the year, and the wrangling the went on amongst the states that has wiped the Commission’s findings from public condemnation.
There was a gabfest in Glasgow, which seemed to be useful, apart from the lack of contribution made by Australia. Sadly, the PM made his ground-breaking presentation outlining ‘The Australian way’ to a packed house of a cleaner, sound recordist and journalist who copped the ‘dog watch’ and was probably asleep. Even the hecklers were too disinterested to show. I continue to find the contrast between the reliance on the science in relation to Corona, and the total dismissal of the science in relation to the reality of climate change, a complete mystery.
Then, just as we thought the worst was over, along comes Omicron, and once again, we are caught with our heads up our arses. My old dad used to say everyone made mistakes, but only a retard made the same one twice. The federal leadership must all be retards by that measure.
At the state level, there has been wholesale leadership change in NSW, and it has become very clear that premiers vowing to keep their states sovereign is a winning strategy. I conclude that the winning is only because of the total leadership vacuum coming from Canberra.
The Covid battle, seemingly being won towards the end of the year, has suddenly in December been put back on the agenda, this week blowing up with record cases being identified. The emergence of this new, hyper-spreadable omicron version may yet force punitive action to again stamp on human beings doing what they need to do for their own psychological well-being, congregate and communicate in person. As I write this on Christmas Eve, new Covid cases are comfortably over 5,000 a day, a level that a month ago would have induced panic amongst NSW politicians, but now seems rather ho-hum.
Rorts have become so common, they are almost ignored by the media and voters, apart probably from that modest percentage of voters who are deeply engaged and angered in the process. There have been plenty to pick from. Almost $300 million given to Australia’s largest companies who actually increased earnings during the lockdown seems just so wrong. Another 6.2 billion was forked out to businesses with more than 10 million in turnover that did not meet the 30% fall in turnover threshold in the first 6 months of the scheme. Meanwhile, small businesses are closing, and those in the arts, a foundation of our cultural life are left to their own devices. Despite the faults and rorts, the money pumped into the economy has been essential, and cushioned the Covid induced fall in activity that happened.
The ‘Merde massive’ perpetrated by the government unilaterally tearing up the submarine contract then lying about the circumstances leading up to, it leaves Australia looking like an unreliable partner. Not much antidote to our trade problems there, coming as they do on top of the idiotic rattling of our tiny sabre towards our biggest trading partner China. Let’s hope they are sufficiently gentlemanly to hold off until we have our new subs, about the time my granddaughter will be retiring.
What about the leadership wrangling in the junior government partner, the National party, giving us Barnaby back as deputy PM. Clearly, Barnaby and the usual PM can barely stand to be in the same room, not a recipe for good governance. Nobody seems to like the Nats, outside of the few seats they manage to hold, which I suspect will be subject to aggressive independent focus in the lead up to the next election. Speaking of which, many of the sensible moderates in the liberal party will be up against it, as they struggle to publicly support climate policies they must privately consider no better than wishful thinking by a few recalcitrant nig-nogs.
Amongst all this, the Liberal Government discovered belatedly that the culture in and around parliament house stank. In fact, it stinks so much that in any other workplace, executives would be fitted for striped suits and shipped off for an extended holiday at public expense. This has been very inconvenient in the early stages of an election runway for some time early in 2022. However, the PM is making the supreme effort to put it all behind him as he massages messages, and the truth. I wonder if the report, promised to be public, commissioned by the PM from his departmental secretary investigating the accusation of rape in the defence ministers office will ever see the light of day? I guess not.
More broadly, despite the covid induced trading environment, property prices in Sydney and Melbourne have gone mad. Lots of people taking advantage of the historically low interest rates, ignoring the consideration of what happens when interest rates go up. The reserve bank governor after reassuring us they will stay low for several more years has recently softened his language. This leads to a conclusion that we will see them creep upby the middle of next year, which could lead to a middle-class bloodbath. Please note, I am absolutely unqualified to make this prediction, but common sense does dictate an increase soon.
Meanwhile, Small Business struggles to generate revenue, pay wages, and keep the place going. A quick look around most shopping areas at the closed retail outlets, and industrial parks at the locked factory units will tell you how well that is going.
The war (or was it another ‘police action’?) in Afghanistan is over. Pity about those Afghans left there, particularly the reviled Hazaras who are paying a high price for our so called ‘principles’. Australia played its part in the deception of those in the region, and ourselves, right from the beginning of the mess when President Bush decided to punish Al Qaeda after 9/11 2001, and invaded Iraq. The excuse was the non-existent WMD, which had nothing to do with 9/11. We ended up 20 years later with an ignominious withdrawal from Afghanistan after massive expenditure of gold and more importantly, lives.
The Americans managed to get rid of their President in the November 2020 elections, with Biden taking over in January, but not before the US Capitol was subjected to scenes reminiscent of a coup in some South American backwater. The dangerous sniping from the sidelines by Trump continues unabated, but it appears to me that fewer beyond the rotten heart of the republican party are taking notice every day.
Division throughout the developed world has seen the rich get richer and the gap widening to all the rest over the last 12 months. Social media has played a role in this, and the backlash will lead to regulation of some type. In the US, Congress is starting to consider how they go about this. Problem is, very few of them have the foggiest idea, so the potential for stupidity is substantial. Europe has had a try, but the GDPR (General Data protection Regulation) regulations have not slowed down the rates of ‘anti-social’ material by much, largely because the main platforms are US owned. Australia’s pathetic attempt to fund journalism becoming law in February by forcing social platforms to pay for news content, has just helped News Corp to fatten its bottom line. Facebook demonstrated its contemptuous corporate power by shutting down in Australia for a day, reminding everyone that they were the biggest bully in the playground. This dog is best repealed, quickly, and replaced by some sensible measures drawn up with the public interest in mind.
Supply chains around the world have been ripped apart. If you can get a container delivered to Sydney or Melbourne it will cost you 4 to 5 times what it cost a year ago. Imported finished products and raw materials are in short supply, and prices have skyrocketed. There is a real possibility our trucks will stop progressively in the absence of AdBlue, an additive made from urea, an ingredient in fertiliser. Australia’s only producer Incitec Pivot is closing its Brisbane factory because they cannot get a reliable gas supply, ironic given Australia is the biggest supplier of LNG into the world market. China makes 83% of the world’s supply of urea, and needs it in the domestic industry, so no more exports, and the rest of us can get stuffed. This is an example of economic power being wielded by what is on some measures already the biggest in the world, and on target to be the biggest on all measures within a year or two. This assumes that the fragile Chinese financial system does not crash, that an economy controlled by a central power can defy the laws of economics as we currently understand them. Russia failed 40 years ago in a similar experiment, but I suspect the Chinese are smarter, and have learnt the lessons of history.
I have missed a lot; it has been a busy and eventful year despite the successive lockdowns. Let me know what the two or three things you felt were most important to you.
I have tried to think of good things that happened, thought I would leave them to the end. Well, here I am, at the end, and I cannot think of any. Must be some, help me here.
In any event, have a safe and merry Christmas, and come back in 2022 looking for some improvement personally, professionally, and in our communities.
Thanks for reading, commenting, and sharing this year, or even if this is the first dose, make it the first of many.
Merry Christmas, and have a great 2022, a low bar to be better than 2021
Allen.
Dec 20, 2021 | Change, Operations
Some great minds have worked in increasing the performance of management.
Einstein is one of them, although may not have known it when he said: ‘Everything should be made as simple as possible, and no simpler’.
Along the same lines, 20 years later Einstein’s mate Peter Drucker said a similar thing: ‘Much of what we call management consists of making it hard for people to work’
Never was a truer word said about the machinations and genuflections usually necessary to get anything done in any organisational bureaucracy.
Organisations evolved to give us leverage, no one person can build something as simple and today basic as a computer mouse. There is a huge pool of people who all contribute from the electronics to the physical formation and design of the thing. This pooling of resources allows us to scale. This is not a new phenomenon. We have been complicating our lives since we moved away from subsistence family level groups. This classic genealogy of a pencil: ‘I, Pencil’ by Leonard Reed was written in 1946, well after we started complicating our lives by fragmenting and specialising tasks to achieve scale.
The down sides are real.
The added transaction costs in scaling operations, necessary to manage all the divergent and disparate jobs that need to be done, go largely unreported. As a result, they linger like a fart in an elevator, making life a bit more complex and often unpleasant.
The basis of all the thinking that has been labelled ‘Lean’ is flow, a necessary pre-condition to profitable scaling.
How do you get things to flow, to manage to the constraints of the value stream, thereby focussing attention on the constraints in some sort of order to be able to address them progressively in the most productivity delivering manner.
Achieving flow is akin to deep cleaning the elevator. It removes the lingering residue of people creating friction, making life more complicated than it needs to be.
