Mar 29, 2021 | Change, Leadership
We seem to accept that the world is getting faster.
The tempo of activity is picking up in just about everything in our lives, and the 2020 pandemic did nothing to slow anything down. Instead, it operated as a catalyst to an increase in tempo across the board.
Trends that were evident, emerging slowly, suddenly took on a huge leap in tempo. The pace of government decisions, the evolution from supply chains and business models, remote work, and others, all accelerated. Perhaps the most astonishing is the speed at which a vaccine for Corona has been developed, tested, and is into the early stages of distribution. A process that would normally take years, condensed down into 10 months.
John Boyd spoke about Tempo as being the determining factor in the OODA loop. The combatant that could realign their tempo quicker than their opposition won the fight.
Several Cafes in my local area of which there seemed to have been a pre-Covid oversupply, have not reopened. A characteristic of those that have reopened is that during and since the height of the closedown, they were able to evolve their business model. They introduced new products and services quickly, way more quickly than would have been the case in the absence of the virus.
In the natural world, the tempo of climate change appears to be quickening. The melting of the polar ice is now happening at a rate higher than the worst-case scenarios predicted just a decade ago. Compounding that is that the tempo of the melting is increasing as the seas warm, as a result of the reflective ice being gone.
All around us, the tempo of life is speeding up, and the speed is reflected in the speed at which changes in direction occur. As a result, it is becoming increasingly easy to be left behind, even when you are diligent about continuous improvement of your own operations, and in scanning the environment in which you compete for signs of ‘movement’.
It seems to me that long term survival will require significantly more attention to be focussed on the wider context of your competitive environment than has been the case in the past.
Finding the right means to deliver that wider and deeper understanding of the competitive pressures will evolve into a determining factor in commercial survival.
Tempo.
Tempo of activity, of decision making, of change, and of competitive action.
Do not be left behind, you will be shot down.
Header photo: John Bonham, legendary Led Zeppelin Tempo man.
Mar 24, 2021 | Change, Leadership
There has been a lot of commentary on what we as a manufacturing cohort, and the government should do to haul Australia out of the steady decline of manufacturing.
Most of it is good, thoughtful commentary, but we seem unable to move forward meaningfully on many fronts.
Question is, how will we know what works and what does not in the absence of specific and apolitical (in the widest sense of the word) measures?
Following are some thoughts distilled from the commentary, and relying heavily on the 2016 paper by the Australia Institute. On re-reading this paper, it seems obvious from my interactions that the numbers may have changed somewhat, but the trends are still in place, and probably more advanced. An update would be immensely valuable.
It seems sensible to me to articulate a few boundary items that need to be addressed before any detail can be reasonably considered.
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- If we are to effectively manage investment and activity across the economy, we need a common base and clear definitions of what is included under ‘manufacturing’. In short, a common nomenclature.
- Following nomenclature clarity, we then need what is in effect a national manufacturing P&L, undiluted by fuzzy numbers from other sectors, free from confirmation bias, and understood by all. While we do have a range of measures currently via industry bodies, the ABS, and various government departments, there is no common base for measurement. This lack of commonality just serves to obscure the numbers, and more importantly, the trends.
- Having such an explicit set of manufacturing numbers would enable valid comparisons against which to measure progress. Comparisons to other parts of the economy, similar economies around the world, the components of the total numbers, items like employment, sources of inputs, impacts of investments, supply chain agility, all the things we do routinely for our own businesses. This would not be an easy task, but to my mind, it is a vital one.
- Having solid articulation of the current situation is the core of any sensible strategic planning. While we all know the plans will be flawed, and need to evolve with circumstances as implementation progresses, the process of strategic planning is essential.
- Eliminate the prospect of ideological change as governments change by deepening the recognition that for the economy to be sustainably prosperous, manufacturing is a foundation stone. Businesses will be more likely to invest when their time frame of policy certainty is longer than a few short years and managed by a bunch who spend their time watching what the loonies on Twitter think is a policy input. The debacle with energy policy, and lack of it, over the last decade should be a salient lesson for the future.
- Invest in education and research, the underpinning that businesses need to harness to deliver innovations products. We have a fine record of research on limited budgets, but a lousy record in the commercialisation, although there are individual examples that run against this observation. The intellectual infrastructure that delivered this fine record has been rotting for 35 years or more, and we are seeing the impact now. The cycle time of science to marketable product is more like 30 years than 3, and that time frame requires public investment. Sadly, we seem unable to grasp this simple notion. As a result, we have bureaucrats trying to pick winners in a 3-5 year timeframe, and the continuing erosion of investment in education.
We should take advice from some of the real geniuses that have passed through.
‘You cannot manage what you cannot measure’ is Peter Drucker’s often used quote with which I agree, partly. Einstein, speaking on the same topic also said, ‘Not everything that counts can be counted, and not everything that can be counted, counts’.
Two geniuses having different views on the same topic. How confusing is that?
No wonder the Canberra clown factory and its state based training camps cannot get its head around the challenges.
Header cartoon courtesy Tom Gauld at www.tomgauld.com
Mar 11, 2021 | Change, Leadership, Marketing
Every successful strategy I have seen, heard of, read about, or imagined, has three common factors. The first is obvious, the second and third less so.
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- The strategy is implemented.
- The strategy is communicated widely as a story, that draws stakeholders in, giving them an emotional stake in the outcome. It is backed by research facts and figures, speculation, and opinion, but at its core, it tells a story.
- The strategy is modular, evolved from the bottom up, not delivered intact in final form by the hand of some commercial demi-god. One section builds on, and in turn relies on other parts of the strategy, for the wider impact. Each part is interdependent of all other parts, to some extent.
This organic structure enables strategic evolution in response to the changing external environment and internal learning as the strategy implementation evolves, without losing sight of the objective. The path to the end has many possible sub paths, but the end is clear.
A successful story has a beat, a rhythm to it that responds to some sort of incident, observation, or crisis, and a resolution, all built up in a series of ‘beats’ each of which has each of these elements escalating into sequences and a climax of some sort.
The emergent strategy, like an organic structure, has a range of base materials organised as self-contained units that combine to form an ever increasingly complex and interdependent system.
Developing a strategic model that has the potential and opportunity to evolve is not something that comes easily from a template, or ‘packaged’ advice. It is extremely context sensitive, fragile in early stages, requiring constant expert attention and nurturing.
Call me when you need some of this ‘strategic gardening’ to enhance your performance.
Header cartoon is once again courtesy of Scott Adams and Dilbert
Mar 2, 2021 | Change, Governance, Management
Covid has forced remote working, and many have responded by introducing a well-proven strategy to maintain the sense of ‘togetherness’ as well as delivering accountability.
The ‘Huddle’
It goes by many names, one of my clients calls it the ‘daily toolbox’.
Nevertheless, it is a challenging idea to implement. Initially there are always those who see it as just another imposition, or waste of everyone’s time, but done well, they are a wonderful tool, and not just for these Covid times.
Following are the 9 practices I have seen that contribute to the great outcomes possible:
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- The daily huddle is by definition, daily, which means that the next 24 hours are the topic of discussion. Anything else should be treated elsewhere in the most appropriate forum.
- Use a set time, and always be on time.
- Make the agenda consistent and focussed on the tasks and accountabilities of those in the huddle only.
- Follow ups, and problems that need further consideration should be taken offline or escalated. The huddle itself should be no more than 15 minutes at the most.
- Do not allow waffle. Preparation for the huddle means that people have points they need to make. Written down and read verbatim is often the best way. However, use full sentences, your summary, while clear to you, may not be to others.
- Everyone in the huddle is given the opportunity to speak, and those who naturally are reticent, are prompted by the chair.
- Ideally, the chair should rotate in some manner that suits the group, which gives all an equal share in the ‘ownership’ of the group and its outcomes.
- It is a place for shout-out praise as well as noting problems and emerging challenges.
- Be attentive. No devices that intrude are allowed.
‘Huddles’ at the next level up, weekly, monthly, work the same way, and are ideally timed to follow the previous huddle, so items are easily and seamlessly escalated.
Huddles are a great way to increase the communication in any enterprise, always the source of most employee angst. Building them into the ‘way we do things around here’ enables rapid, clear communication, one to many. This results in everyone getting the same message at the same time, with a minimum of contextual colouring allowed to creep in.
The outcomes are always around a greater sense of accountability, team and individual, and a culture that involves collaboration. Irrespective of the future of the workplace post the COVID-19 vaccine, when we evolve to some sort of new normal, make your version of the daily huddle a part of it.
When you need an experienced hand to help implement this enormously valuable business improvement strategy, call me.
Header credit: Again, Dilbert and his mate Scott Adams pick the challenge implementing a ‘huddle’.
Feb 22, 2021 | Change, Leadership
I cannot help but be amazed by (what I regard) to be delusional crap coming out of the mouths of politicians from both sides, after Facebook exercised its power and chopped Australia off the map.
Michelle Rowland, the Labor shadow communications minister wondered if ‘it was the beginning of the end of Facebook in Australia. This reflects the mutterings of the Minister, Paul Fletcher, who should know better, and I am sure he does. However, he is gagged by the naive simpletons in the government who simply have no idea of the power of the platforms they have allowed to dominate the landscape.
I well recall the confected emotion generated by the debate about media diversity in the 80’s and 90’s. The claim that our democracy, and perhaps even lives would be threatened by the erosion of a diversity of ownership across what are now legacy mediums, and how the regulations put in place to ensure that diversity would benefit us all.
So much for diversity. Two global multinationals dominate in some areas, while an American media magnate dominates across the legacy mediums, making billions in profits, and crying for help against those who ate his digital breakfast.
The threat by Google to cut off search in this country, now seemingly off the table, is being seen as a win for the government. ‘Google backed down’ is the claim.
No, Google simply took a step back to see what would happen next. The clusterf**k that would have been the landscape of Google cutting Australia off the map is almost unimaginable. Geometrically worse than Facebook taking the same action, as so many businesses use the tools provided by Google to run their internal processes.
We have two lessons coming from this exercise in global power.
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- The shallowness of the strategic thinking going on in Canberra, and to be fair, most other world capitals, and how their power has been knackered by a couple of digital unicorns.
- How absolutely necessary it is for businesses, particularly SME’s who are very vulnerable, to take back control of their own digital lives.
When you need a catalyst for your thinking on these sorts of existential risks, let me know, I can help.
Feb 15, 2021 | Change, Management
I expect 2021 will be a year where there is a lot of M&A activity as businesses weakened by the impact of the Corona virus are snapped up by rivals with a bit of cash.
The simple equation of M&A is that the price to be paid for an acquisition will be determined by the assessment of the risk and reward by the buyer. The seller can influence the equation, by managing the perceptions of the future risk and rewards, but at the end it is the buyer who determines the price they will pay. It is then up to the seller to accept or walk away.
Risk and reward are determined by the buyer as the assessment of future cash flow from the acquisition, together with any strategic benefit or cost advantages that may accrue.
Often when there is a disparity, there is an arrangement of an earnout period with KPI’s attached to payments.
This is in effect, a risk reduction strategy of the buyer, at the expense of the seller.
It is often the case in SME’s that the enterprise is apparently dependent in some way on a few individuals in the business, and their relationships with customers. The transfer of these relationships is often the key to the future cash flow.
However, it remains that an earn out is the buyers risk mitigation at the expense of the seller.
The seller may choose to take a lower price as an alternative and go sit under a palm tree rather than working in the business he/she previously owned.
Maximising the price for the seller therefore becomes a marketing task, completed prior to any detailed negotiations.
This is no different to tarting up your home before you put it on the market.
Your real estate agent will tell you to fix the fence, paint the interior, do a bit in the garden, make sure all the light fittings work, remove all the clutter to make the place look bigger, and perhaps rent some designer furniture to maximise the price. When selling your business, the advice will be similar.
Do a Due Diligence process for yourself. Anticipate every question that will be asked, and answer it before it is asked, thus removing it as a potential stumbling block.
It is never too early to polish the assets of the business, and work at reducing the liabilities, irrespective of whether or not it is on the market. You never know who might blow in for a look, and everything is for sale, for a price.
Why do SME owners with a valuable asset for sale so often ignore common sense advice?
