Jun 20, 2025 | Change, Governance, Innovation
Australia’s governments over time have, rightly, believed that the commercialisation of innovation is the key to long term prosperity.
As a result, governments of all persuasions and at all levels dole out billions each year in all sorts of grants, subsidies, and parallel programs.
Then, on a regular basis we have enquiries by well meaning and usually highly qualified people that come up with similar conclusions that the previous few and often very expensive enquiries have delivered: we are crap at it.
In successive weeks, the PM and Treasurer presented their view of the challenges facing us at the National Press Club. Both were very impressive performances, and in particular the treasurer hooked his agenda firmly onto the ‘Productivity’ challenge.
The Treasurer outlined the principles of his agenda. However, he did not get into the weeds of the sources of the failure to date that see us struggling with productivity in the economy, the problem to be solved. He did however acknowledge that hard to measure services are increasingly dominating, and we are all getting older, making the productivity challenge that much greater.
Sensibly after repeating the same mistake numerous times, and ending up where we are now, we should be asking ourselves ‘Why’.
My take on ‘Why’.
Bureaucracies have two conflicting, irreconcilable imperatives:
- On the one hand, they want to be fair and treat everyone the same. This makes commercial in confidence often challenging. (perhaps I overemphasise this as a result of a very nasty incident in my commercial past that will never be forgotten)
- On the other hand, they want to exercise discretion and take account of individual circumstances and technical advances made by program participants engaged in the various programs.
There’s no way to easily optimise these conflicting objectives at the same time.
On top of those two drivers of bureaucratic fossilisation, you have two further impediments in the Australian context:
- The impact of personal ambition, turf protection, and management of public sector KPI’s that have nothing to do with outputs, but everything to do with inputs that hobbles public sector engagement.
- Our federated system drives fragmentation.
Published today is an excellent analysis of the way forward by John Howard (not that one) from the Action Institute that I hope is widely read and deeply considered by those who will be involved in the treasurers productivity roundtable in August.
Jun 17, 2025 | Change, Leadership
“They snatched defeat from the jaws of victory.”
That phrase echoes around footy grounds when a team, cruising to a win, suddenly collapses. The hunger fades. The cohesion cracks. The urgency evaporates.
Winners who stay winners do so because they never switch off. They stomp on a throat when they have the chance. And when they’re behind, they still believe they can come back.
Sporting analogies make great business metaphors. They’re colourful, visceral, and most of all, familiar.
Skype is a prime example of dropping the ball over the line.
Microsoft has been a cash machine for decades. Dominant, deep-pocketed, and ruthless when it suits. In short, they know how to win. But last month, they quietly walked off the field and took their former champion with them.
Skype was officially euthanised on May 5, 2025.
The original disruptor. The upstart that reinvented digital voice communication. The king of the mountain. Gone.
Skype began in 2003, the brainchild of two Estonians who wanted to reduce the cost of voice calls by using peer-to-peer protocols. The product exploded. eBay snapped it up in 2005 for $2.6 billion. Then in 2011, Microsoft bought it for $8.5 billion. It should have been a match made in heaven.
But inexplicably to me at the time, Microsoft launched Teams in 2017, and from then on, Skype looked like yesterday’s hero. Despite a global user base, a household brand, and a treasure trove of usage data, Skype was left to wither.
Why? Only insiders can say for sure, but from the outside, it looks like the classic case of a team where the halfback and five-eighth couldn’t agree on the game plan. Maybe one group wanted to modernise Skype. Another pushed all-in on Teams. The result? Strategic paralysis.
Then came COVID, and video conferencing exploded. Zoom turned from a quirky tool into a verb, others rushed to grab a piece of the expanding pie, and Skype appeared to be disinterested in even playing.
Microsoft had every advantage: distribution, brand, cash, data, development talent and loyal users by the millions, but they didn’t press the advantage. They coasted, and the game moved on.
So the final whistle has blown. Skype, once the dominant player, was taken off the field not by a better team, but by its own coach.
Small business owners: don’t assume past success guarantees future wins. Stay hungry. Stay alert. Don’t let a lazy midfield cost you the match.
Apr 28, 2025 | AI, Change, Governance
American Roy Amara first coined what has become known as Amara’s law.
‘We tend to overestimate the effects of technology in the short term, and underestimate the effects in the long run’.
‘It was put more simply by (I think) Reid Hoffman who said: ‘the future is like a windscreen coming at a moth at 100mph.’
The initial excitement, hype, enthusiasm for the idea is followed by a period of underperformance, and disillusionment, before the real impact of the technology kicks in and changes the way we do things. Gartner’s well thumbed ‘Hype cycle’ is a better known version of Amara’s law.
Time and again over the last 30 years we have seen this effect on vivid display.
The internet, smartphones, AI, electric vehicles, Hydrogen as an energy source, (just entering the disillusionment stage) and many others.
It can also be applied to wider contexts, we just need to look for it.
Advertising.
No new TV ad campaign was ever released into the world without exalted expectations about the sales that would result coming from the ad agencies and those often clueless advertisers paying the freight. Then, unexpectantly, the ad is shown to be a dog, and is quietly euthanised.
Climate change.
Remember the hype and enthusiasm for ‘doing something’ that accompanied Al Gore’s influential doco ‘An Inconvenient Truth’ back in 2006. Nothing happened, the hype and enthusiasm was drowned by hubris and short term individual, corporate and political self-interest. While it seems unlikely at the moment, I remain confident that realisation will hit soon that we must take remedial action now in order to mitigate the long term becoming worse. Meanwhile. continuing to do nothing more than provide lip service ensures the moth will hit the windscreen in my grandchildren’s lifetime.
Business.
There are cycles of ‘fashionable’ management frameworks that seem to come, become the next great management breakthrough, undergoes the hype, then is shown to be np more than an emperor dressed in some transparent new clobber. Sometimes they re-emerge rebranded to go through the process again. Michael Hammers 1993 book ‘Re-engineering the corporation’ was such a fashion. I recall sitting around a board table listening to a very slick but hollow (even obvious to me at that time) presentation by a high priced consultant making promises of easily won great profit improvements from an aggressive ‘re-engineering’ of my then employer. That business hit the windscreen several years later, having cherry-picked the easy bits of the process, while ignoring those that actually made the long term difference because they were too hard. A few years later, Al ‘Chainsaw’ Dunlap had another run at it which made him a fortune, but left chaos in his wake. There are many more examples, the fall of GE from the largest corporation in the world to being virtually broke being one.
Politics.
Governments are relentlessly hyping the impact of their latest policy, more intensely than usual around election time. They whip up enthusiasm, at least amongst their acolytes, then falling into the trough of hubris. Usually, there is a renewal under a different name at a later time, often the next election. Remember the ‘Gonski reforms’ to education hyped by the then government, and supported in principle at least by the then opposition? Swept under the carpet of hubris and self-interest, again. Similarly, the 2010 Henry tax review was received by a grateful government who then shelved it. We may now have reached a point where the dust will be partially removed by necessity.
Americans are in the midst of waking up, again, to the reality of a second Trump administration. My contacts over there indicate dismay bordering on horror, and most of the working class Trump voters are about to learn the cost of the hype to them. The US moth seems likely to be splattered over the windscreen by the 2026 mid-term elections.
Artificial Intelligence.
Occasionally, the outcomes go way beyond what was originally envisaged. AI has been evolving for decades, but it exploded into the wider public awareness when ChatGPT was launched in November 2022. We are still experiencing the upswing in the hype cycle; I am certainly playing my small part. However, at some point I suspect soon, the tsunami of tools emerging, the sheer complexity of choice being forced on us will overwhelm all but the few, and we will collectively throw our hands in the air when the robot that does our washing does not appear. This collective action, if that is the way it occurs, will just let the first movers race away with the lollies.
The hype cycle remains around us, daily impacting on our lives. Its greatest risk is that we let it drive our decision making by making short term choices that are strategically flawed.
Apr 14, 2025 | Change, Communication, Governance, Leadership, Marketing, Strategy
When you look you see Hofstadter’s law around you everywhere, every day.
We all understand Murphy’s law, which accurately states that is something can go wrong it will, probably at the worst time. Murphy has a sibling, articulated by Douglas Hofstadter which states: ‘A task always takes longer than you expect, even when you take into account Hofstadter’s law’.
Planning is a part of our lives. Some things are easy to plan, the consistent characteristic of these is that there are very few variables over which you do not have control. For example planning a trip to the supermarket, you can check what you need you control the time, the choice of supermarket, where you park, how you work the store, the choices you make between brands. Very few uncontrolled variables.
By contrast strategy is an exercise not just in predicting the future, but then making choices how best to deploy your resources in a way that enables you to shape the future to your benefit by exerting some influence over the range of variables over which you have no control.
Entirely different challenge, as there is never an explicit ‘right’ answer.
When we talk about strategic planning we are effectively mixing two incompatible factors. The uncertainty of the future and the forces over which we have no control, and the certainty of the resources we have to deploy, with uncertain outcomes.
Currently in this country we have a huge black hole called defence planning into which billions of taxpayers dollars are being poured, in the mistaken view that we are able to predict the future and therefore plan as if we could control the variables.
The better way is to have a robust strategy which enables flexibility in the way assets are deployed short term.
Projects tend to expand to fill a time available, while at the same time we habitually underestimate the time that is required to complete any given task, no matter how rigorous we are in the planning.
Mar 20, 2025 | Branding, Change, Marketing, Strategy
We no longer own stuff, increasingly we are renting it in one form or another.
That lack of ownership discourages brand loyalty and makes defining the boundaries of a contested market all that much harder to do in a way that reflects the psychology of potential customers.
Years ago, while marketing fast moving consumer food products the logic was, we did 90% of the prep work in the packet. The strategy was to suggest to the overworked stressed woman who in those days did all the cooking, to add some garnish and therefore feel she owned the result. The best example is cake mix. Almost everything was done in the packet, all a cook had to do was add an egg, beat it with a fork, and stick it in the oven.
We’ve taken that idea much further now.
One of my sons lives in the inner the suburbs of Sydney and does not own a car. When he needs one, he simply uses the app and within a few minutes walk, there is a car waiting for him.
What we’ve lost in this process is the sense of ownership, the psychological comfort that something was ours. This spreads past the ownership of a car to things like music.
I have an irrational attachment to a couple of 50 year old vinyl records that played a significant role in my young life. The music on those records is ‘mine’. I do not play them anymore, don’t even have a working record player, but separating from those old vinyl records and their memories by association would be painful.
The challenge for marketers now competing in a subscription and rental driven world is how you replace that sense of ownership. If you can figure it out in your product category, you will win.
Jan 8, 2025 | Change, Governance, Leadership, Strategy
Around this time two years ago, I questioned the effectiveness and fairness of the initiatives bundled into the ‘National Reconstruction Fund.’
I am still questioning.
With an election looming in early 2025, I expect a predictable flurry of press releases from both sides of the political divide, each extolling their own recycled virtues. If we were able to fast forward to 2027 and look back, I have little doubt that the progress made will have been as glacial, if discernible at all, as it has been in the past decade.
Since my initial commentary, the updated Harvard Complexity Index has marked Australia’s further decline to a rank of 102, squeezed ignominiously between Senegal and Yemen. This is a stark indictment of the nation’s diminishing capacity to engage in sophisticated manufacturing and industrial activities.
There are no short-term fixes for this relentless erosion of economic potential.
The likelihood that our grandchildren will enjoy the same standard of living my generation took for granted grows slimmer with each passing year. Tragically, the long-term structural reforms needed to reverse this trend remain conspicuously absent from the agendas of those currently in power, and those seeking it. Beyond facile declarations and populist slogans there is little real substance.
The pack of political clowns in Canberra and beyond, hold the levers necessary to drive meaningful change. However, they seem paralysed: too timid to take bold action against the vested interests of a few, too ensnared by the trappings of power today, or, perhaps most damningly, too inept to grasp the urgency of the situation.
Perhaps it is all three?
Our past prosperity was built on the back of commodities.
For most of the 20th century it was those we grew, wool, beef, and grains. From the 1970’s that reliance evolved to those we dug up and exported for others to add the value. In parallel, manufacturing crashed from close to 30% of GDP in 1970 to 5.4% according to World bank figures in 2023.
Future prosperity will have an entirely different face.
It will be constructed of applied technology delivering globally competitive solutions to challenges only just emerging.
For those we require education, scientific discovery, application of those discoveries to global challenges, and a deep well of intellectual and financial capital generation to drive the development.
This is a challenging agenda, and we need to start the surgery now. The longer we leave it, the more painful it will be, and the further behind our competitors we will be starting.
Addendum January 11, 2025.
Professor Frank Bongiorno From ANU published a thought provoking piece back in 2021 reflecting on the erosion of Australia’s universities. It articulates my views on the topic way better than ever could, and deserves to be noted and spread. It was republished on ‘Inside Story’ here, and I reshared it on Linkledin.
