Feb 11, 2021 | Change, Communication
Pretty obviously, ‘Free’ is the most powerful word in marketing. It is the best way to get people to trial a product, make the trial free, no risk, no commitment, no money. However, it is hard to make ‘free’ commercially sustainable.
The second most powerful word is ‘because’
‘Because’ gives people permission to do something they would not normally do, it provides the reason to change behaviour, it removes the discomfort of the change, we can always revert, we just did it this once ‘because…’
Next time you want to go to the front of the line in a supermarket, try asking politely, and using ‘because’ when you ask. The addition of some emotive reason after the because will increase the likelihood of an ‘OK’ even more.
E.g. ‘would you mind if I go in front of you‘ success rate about 20%
‘Would you mind if I go in front of you because I only have a few things” success rate about 40%
‘Would you mind if I went in front of you, because I only have a few things and my sick mother is waiting in the car‘ success rate about 80%.
Try it the next time you want someone to do something for you.
Header cartoon courtesy of Scott Adams, and Dilbert.
Feb 4, 2021 | Change
The most visited StrategyAudit post of 2020 was the one entitled: ‘Hind-sighting the Corona-demic.
In that post, I projected forward to the end of 2020, and made a number of observations about what I thought would have happened as a result of the ‘Bug’. At the time, being a bit of a ‘metrics-nerd’ I promised to review with the benefit of real hindsight and give myself a score.
So here goes.
Digital transformation has accelerated.
It seems unfair to take any credit for this one, as it was so blindingly obvious. However, take the brownies when they are on offer.
Score: 5/5.
The role of deep expertise.
It seemed to me that the ‘bug’ would highlight the necessity of listening to genuine experts, as distinct from those who shouted an opinion, and called it a fact.
The outcome seems to me to be a binary one, as we have become even more split than was the case previously, although the trend was evident.
On one hand, the health officials, at least in this country have been listened to, and their recommendations largely implemented. On the other, a group of those same politicians remain wedded to the lunacy of climate change being some sort of conspiracy, in absolute avoidance of the science.
Globally, that same trend has been magnified, put into stark relief by the odious ramblings of the former US President that led to the invasion of the US congress buildings on January 6.
Overall, I think in this country, that has been the result. However, a scan of the academic articles, of which there are many, seems to point out that not much has changed, although most of the articles were sourced from the US, where the partisan divide washed over everything else, including common sense for a significant percentage of the population.
Score: 3/5
Existential crises become accepted challenges.
The jury is out on this one. The public statements of those who make these decisions trend along the ‘we must do better next time’ line. The cynic in me suggests that short memory will kick back in. it is one thing to commit resources to the crisis in front of us right now, another entirely to commit those resources to a future crisis that while almost certain, the exact form and timing are unknown.
Let’s hope not for the sake of our children.
Score: 3/5
Dunbar’s number.
There is little doubt that Robin Dunbar’s theories that human beings could only hold 150 close relationships at one time, has received renewed proof in spades. We have reverted to smaller personal communities dominated by those close personal relationships we have. Technology has enables us to keep in contact with wider networks as necessary, but the idea that we can have wide personal and emotional networks has been debunked.
However, the second part of the prediction that we would see the malignant potential of Facebook et al has been passed over. While the platforms belatedly have banned some of the more egregious ranting, and we may have become a bit more careful, usage has in fact increased.
Score: 2/5
Economics and Politics.
There was a bunch of predictions included under this heading. Some seem pretty right, a few others way off the mark.
The economy certainly did tank, but there seems to be a blasé view of how the bill incurred to limit the tanking will be paid. What was a ‘crisis’ when the budget deficit was approaching 20 billion has become an item of ‘not a problem’ and ‘we have to react to what is in front of us’ as it approaches 250 billion and 12% of GDP currently. The Federal government gross public debt has been variously forecast to be around 35% (684 billion) of GDP in June, increasing to 55%, well over a trillion in 3 years before the peak is reached. The public debate on all of this has been muted at best, almost certainly because there are no political brownie points in either side in it, and it may be that neither side would want to be in the driver’s seat, were it not for the largess handed out to those in power.
For a while politics became more respectful and collegiate. However, towards the end of 2020, that collaboration on our common problems was fraying badly.
There certainly has been a lot of talk about the much-needed sovereignty of supply chains, and the ‘re-shoring of manufacturing. Little has happened beyond a lot of press releases, and a few undertakings, such as that by ‘Twiggy’ Forrest to bring back all the manufacturing of RM Williams, which he bought last year for a bargain.
Super has been comprehensively raided; I certainly got that one right.
The institutionalisation of the anti-Corona measures are proving hard to remove, as predicted. However, the child support has been removed, with surprisingly little (to me anyway) noise, and the jobseeker payments pruned back significantly, although not back to the pre Covid levels, yet. I suspect this will be a very hard one.
I suspected that there would be some pressure to review the nature of the federation as outlined in the constitution, as the frailties have been clearly shown up. No noise at all, got that completely wrong.
Score: 3/5
Commercial intervention by governments.
There was a lot of pressure brought to bear for the government to provide a helping hand to large corporates in trouble. Firstly, the trouble I foresaw was not as bad as anticipated, and those that did stick their hand out got no relief. That might hamper the corporate political donations a bit, but the rest of us are relieved.
Quietly though, there are continuing examples of pork barrelling, which ins effect is public intervention. I have no objection to governments giving a helping hand where needed to industries, but grants to political donors in fragile seats does see the temperature rise to boiling point. These allegations, first surfaced by Michael West Media are currently making the rounds in NSW.
Score: 3/5
Healthcare.
I foresaw a reformation of the byzantine labyrinth that is health care, a monster devouring money at an ever increasing rate. The virus gave us a once in a lifetime opportunity to address some of the bigger troughs into which snouts had become entrenched. No such luck. There was no move whatsoever that I could see, beyond the great job done by the health workers in the front line of the pandemic. It remains firmly in the too hard basket. To be fair, those who would have been needed to do the thinking and policy work have been pretty busy, although the cynic in me screams that there should be plans on the shelf that with a bit of dust removal could have been floated with little further development investment being made. If this is a wrong assessment, what the blazes are all these bureaucrats in every state doing all day in the absence of a crisis?
Score: 0/5
Unions and Government talking constructively.
The collaboration of unions and the Government, across the federation was an example of how it should be done. In the face of a crisis, for a while, everyone seemed to be working in the general best interest. However, as noted, that collaboration became frayed at the end of 2020, and it appears that 2021 will revert to normal. The opposition, however, seems to be back to arguing with itself, although that dumbass Craig Kelly continues to give them gifts.
Score: 3/5
Social distancing.
This seems here to stay, at least for the foreseeable future (that seems to be a day or so currently). Generally, the public has accepted the need, and acted with great forbearance.
Score: 4/5. (perhaps 5/5 but I am a hard marker)
1st world indulgences.
There is no doubt that we have recognised the value in simple things, and those who are genuinely dear to us, rather than just being ‘friends’ on some digital platform. However, as I go back into shopping centres, all the nail salons, a business segment that seems to have appeared from nowhere in the last few years, appear to be doing a roaring trade. Perhaps they are just a lousy barometer?
Score 3/5
We will all be wiser.
Sadly, I suspect we will not. The lockdown in the Northern beaches, resulted, I am told by inmates from the area, dunney paper being as scarce as a politician that tells the truth in the week before an election.
Score: 1/5. Put that down to me still being an irrational optimist.
I am very happy to take comments and observations, particularly those that are contrary to those above.
Jan 29, 2021 | Change, Customers
Technology is not disruptive: it is customers that are doing the disruption, technology is just the tool.
Just like matches disrupted the flint and steel manufacturing industry, Josiah Wedgewood disrupted the pottery industry, and the motor car disrupted the horse transport industry. These three, and many others you can think of, were driven by customers preferring the new offering, as it better met their needs. It is customers who are driving the disruption of shopping, communicating, travelling, and all the rest.
Once you accept technology is just the tool, you can start thinking about customers.
The best place to start is with the customer journey.
What are your customers trying to achieve when they buy a product? Do they want a drill bit, or do they want a hole? Do they want a luxury central city hotel, or do they want somewhere comfortable to sleep with a café nearby for their breakfast?
Understand the customer journey, what it is they are looking for, and the means by which they currently get there is key.
Once you have that figured out, you might be able to see places where the current value chain that serves customers can be re-engineered.
Technology is one way, but there are others.
A business I worked for years ago replaced a network of distributors with direct salespeople backed up by a very friendly telephone process. This was pre internet, so no tech beyond the phone and a hand recorded version of a CRM on customer cards was used. The results were spectacular.
Considering any sort of reengineering of the existing value chain means that there will be an element of risk, However, the risk can these days be mitigated by using the Lean Startup methodology, simply, placing a version of the chain in front of customers and seeing if, and how they use it. If the product is entirely new, it is not much use asking them, as they have little frame of reference. Henry Fords dictum of the faster horse still holds true, but seeing how customers use a new product in its minimum viable form is the best way to gather insight. We used to call it test marketing, so this idea is not really new, but the technology that enables it more easily than ever before is.
Alongside technology enabling customers to make different choices, there comes the second baseball bat to the head of incumbents: the business model.
Again, business models are simply the manner in which you deliver value to your customers. The manner in which this value delivery happens can change, enabled by technology, which changes the business model.
They go hand in hand.
Let’s take retail. I was in a large format general retail store a few weeks ago, and there were customers all over the place playing with their phones. Some were just amusing themselves, but many were price checking, seeking product specifications, availability, and looking at product comparison websites. I am sure some bought products, but equally sure that many walked out, either delaying the purchase or making it elsewhere.
Opportunity lost.
The huge untapped competitive advantage bricks and mortar retailers have, is that they have the potential for human interaction. We are a social species, so seek to commune with others. Yet, this retail store, typically, had cut down on staff on the floor, saving costs presumably in the face of online competition. A few added sales staff who were product experts, there not to sell product but to assist potential customers make the right choice, even if that choice was not available immediately, would have made a huge difference,
Back to the customer journey.
In the old days, customers travelled almost the whole journey in the one place, a retail store. Once they determined they needed a product, they went to a store they trusted, and were given information by the salespeople, made a choice and paid, had it delivered. All in the one place.
That has changed,
Now the power of the retailer that came from controlling the information has been lost, the information is available everywhere, so the customer can make their choices while nowhere near a retail outlet. However, often they will go and have a look at the physical product, in a store, just to make sure, or just to get a better sense of the physicality of the product. They then can check price and availability and make a decision on the supplier. Showrooming is the term often used, and it is a powerful new force, underutilised by retailers. The customer journey doesn’t finish with the product delivery. Now there are tech tools that will follow up, ensure service is delivered, ask for referrals and ratings, all designed to offer information to the next customer who may be showrooming.
Technology is the enabler of changed customer behaviour, not the driver. The driver is customers looking for increased value by seeking and accepting the removal of commercial friction.
Header cartoon courtesy of Hugh McLeod at gapingvoid.com
Jan 14, 2021 | Change, Management
It is new year, all those resolutions going to waste!
It seemed a timely spot to suggest how we can change outcomes, as it is those we want to change, we just call them habits reflecting the action.
Let’s pick one of the most common: ‘I will stop smoking’.
The usual outcome is that we fail to stop smoking, despite wanting to, resolving, and trying often. It is expensive, and not good for us, but it is a ‘habit’ that is extremely hard to break.
I know, I successfully stopped smoking, for a day or two, at least monthly for several years. Then I stopped, successfully, no drugs, not hypnotherapy, no doctors’ orders, now almost 40 years ago, when a packet of Dunhill 20 was still well under a dollar a pack.
What I realised so long ago, was that there were triggers that set up the urge to light up. The phone ringing at work, after a meeting with my then boss, having a beer (that could happen any time) and several others. My strategy was to substitute the habit of lighting up with something else, a substitute habit that satisfied and then replaced the craving for a fag.
Once I had figured out the substitute, and ensured the new routine was in place, it was actually pretty easy after the first few days.
The challenge is to find that new routine that can replace the nasty habit, and build it to the point where it effectively substitutes for the habit you want to stop. Obviously, if you want to lose weight, stopping eating chocolate cake by substituting it for ice cream is not going to do you much good.
The reward of the new routine has to be real, and related to the cue.
Part of the reward I gave myself was semantic. Sounds silly, but it helped.
I never said I had given up smoking, which implies a cost of some sort. Instead, I told myself, and others, that I had taken up non-smoking, which implies a reward, and attracted the support of those around me for the short time it was necessary. Quickly, I became one of those boring former smokers who pontificated about how easy it had been to become a non-smoker.
It is a simple psychological process.
Identify the cue, substitute the nasty habit with a ‘reward’, create a new routine that works to the same cue.
The simple cue substitution process works, whatever ingrained behaviour you are trying to change, personally, or in a group in a commercial context.
Don’t be afraid of it, embrace it.
Good luck with that resolution!!
Thanks again to Scott Adams and Dilbert for the header cartoon
Dec 2, 2020 | Change, Strategy
When do you quit, let go of the sunk cost?
How do you decide when to quit? It is a hugely important component of deciding how and where to allocate your scarce resources.
Quitting, and taking the ‘hit’ is also much harder than just planning. There are always sunk costs involved, and every psychologist will tell you that the pain of a loss is far greater than the prospect of a gain. Then there is ego, credibility and self respect at stake. In a corporate environment, many avoid mistakes, or at least conceding a mistake has been made, as that can have a detrimental impact on career prospects, bonuses attached to KPI’s, and the perception of those around. you.
No matter the size of the enterprise, from the corporate monoliths to the garage operator, there is a reluctance to admit mistakes and move on.
You cannot change the past, but you can learn from it, and move on, if you choose to do so..
It is not being a quitter, it is sensible strategic leadership
The good thing about being at the point of strategic quitting, is that you have actually taken action, done things, and hopefully learned from them, so that the next action you take will be better informed.
What we need is less strategic planning, and more strategic doing, and part of that is being prepared to quit, learn, and move on.
Strategic quitting is a fundamental part of strategic success, embrace it.
Again, Dilbert has the last word, thanks to Scott Adams.
Nov 27, 2020 | Change, Strategy
‘Snowmobiling’ is a term created by Col. John Boyd, USAF to describe the process of pulling down a set of existing items, drivers, or perceptions, and putting them back together in an entirely different way, simply not seen by anyone else, just because it is different, and outside the expectations.
Existing views generate a confirmation bias that ensures that information that confirms those existing beliefs is used as confirmation that the current situation is all there is. Contrary information is either not seen, or dismissed as irrelevant, unreliable, or ‘fake’
The Snowmobile is the result of such a process of disrupting existing perceptions and barriers that made quick, convenient low-cost movement around snowfields a tough problem.
It is the result of breaking down the mechanics of a motor bike, a sled, a jet ski, and a tracked vehicle for rough terrain, and putting them back together in a different form that gives you mobility on the snow.
One of the great outcomes of Covid, which will change forever many of the pre-existing business models, is that is has become the catalyst for widespread Snowmobiling.
I live in Sydney’s inner west. There is Snowmobiling everywhere I look.
For example, the closure of restaurants and cafes was terminal for many, but increasingly, they started delivery via a number of means. Then, a few went a few steps further, breaking down the restaurant experience into its component parts, and putting them back together in a variety of ways.
You can now have your favourite restaurants deliver a pack with all the ingredients for a menu pre-cut, and ready for the pot, along with a USB stick with the specific cooking instructions for that recipe. You want some matched wine, easy. Others have one of the apprentices come to your home, and do all the cooking and service for you, providing everything bar the atmosphere of the restaurant. Then they clean up and take it all away.
Snowmobiling.
Are you doing it, or are you allowing the confirmation bias of the way it was dictate the manner in which you conduct your business?
One of the classic strategy questions is: “What business am I in?”
At a time like this as business models of all types are being not just disrupted, but thrown against the wall, and reassembled in entirely different ways, it is time to ask yourself the question again.
“What business am I in?”
Header photo courtesy DevilDucMike via Flikr
